Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

Oral Answers to Questions — EDUCATION AND SCIENCE

Teachers (Pay and Conditions)

Mr. Haselhurst: asked the Secretary of State for Education and Science what progress has been made in the discussions about linking pay and conditions of service of the teaching profession.

The Secretary of State for Education and Science (Sir Keith Joseph): At the last meeting of the Burnham salary structure working party on 5 December the teachers' panel rejected the employers' proposals and withdrew from further discussion.

Mr. Haselhurst: Has there been any change in that rather depressing picture since my right hon. Friend's meeting with the NUT, and can he hold out any prospects for progress in this important sphere?

Sir Keith Joseph: There was a meeting with the NUT yesterday, which turned out to be encouragingly constructive on the issue of teacher assessment. It appeared from yesterday's meeting that there was a great deal of common ground. It was common ground that assessment goes on in an informal manner at present in connection. for instance, with promotion; it was common ground that some aspects of assessment have implications for pay; and it was common ground, cordially agreed on my side, that a system of assessment could be useful in enhancing the career development of teachers, for instance, with in-service training, and could help the employers to deploy their forces effectively. There was a great deal of common ground. I still have the thought, particularly when promotion prospects have been reduced by falling rolls, that a system of merit-effectiveness-related pay, or even, if it comes to it, of regulations, may have a place. Yesterday there was a constructive outcome.

Mr. Flannery: Is the right hon. Gentleman aware that, like most people, teachers are always willing to discuss their profession and the way in which outstanding problems can be solved? Is it not a fact, however, that the nature of the restructuring is causing the teachers to be even more determined to struggle against what is being proposed? Is the right hon. Gentleman aware that teachers should be given an honourable payment, instead of having their wages tied to the question of restructuring, so that, following an honourable payment being given, any educational problems still outstanding can be discussed?

Is the Secretary of State further aware that the present situation is bound to cause a prolonged struggle on the part of the teachers — [Interruption.] — Have Conservative Members forgotten the meaning of the word "negotiations"?

Sir Keith Joseph: The hon. Gentleman has not taken into account what happened yesterday. As a result of yesterday's meeting, the Department, on my instruction, and with the agreement of the NUT, is embarking on talks with the education employers and the other teacher unions. I hope that the negotiations that still lie ahead on Burnham go well.

Mr. Greenway: Does my right hon. Friend accept that any assessment of teachers should be undertaken by Her Majesty's inspectors, but should include an element of assessment by teachers of equal status or of slightly above or slightly below such status?

Sir Keith Joseph: I am sure that that would be part of one of the options. We are only too anxious to embark on the evaluation of options, which we intended to do through education support grants. I hope that the teachers' associations will in due course make that possible.

Mr. Radice: Does the right hon. Gentleman agree that yesterday's constructive talks with the NUT show that teachers are prepared to respond positively, provided that, for his part, he is prepared to listen and to discuss such issues with an open mind?

Sir Keith Joseph: There is every indication that I am willing to listen. I suspect that it is common ground, though the teachers' unions might not be willing to agree openly, that the very small minority of really bad teachers, after every effort has been made by in-service training to make them effective, should be eased out.

School Governing Bodies

Mr. Madden: asked the Secretary of State for Education and Science what plans he has to change the composition of school governing bodies.

Sir Keith Joseph: Proposals for a new framework for school government in England and Wales were published last year in the Green Paper "Parental Influence at School". The Government are now carefully considering the way ahead in the light of the responses that were received, and will make an announcement in due course.

Mr. Madden: Does the Secretary of State agree that any changes in the composition of governing bodies are rendered largely ineffective unless there is a proper relationship between head teachers and governing bodies, and unless head teachers command the overwhelming confidence of the majority of parents? What help does the right hon. Gentleman plan for governing bodies in cases where head teachers patently do not command the overwhelming confidence of the majority of parents?

Sir Keith Joseph: I think that the hon. Gentleman and I are largely in agreement on that proposition. The Government in their consultation paper proposed some alteration in the powers to clarify the relationship between head teachers, governing bodies and local education authorities. Those proposals received general — though not entire— approbation. Perhaps the hon. Gentleman will take into account what the Government proposed in that publication.

Mr. Stern: In considering responses to the Green Paper on governing bodies, published last year, will my right hon. Friend take into account the fact that the overwhelming majority of parents with children at school are not represented among any of the corporate bodies that responded to the Green Paper? Many of us feel that the proposals in the Green Paper reflected parents' views more adequately than the responses that were received. Will my right hon. Friend take that into account in considering policy resulting from the Green Paper?

Sir Keith Joseph: I am encouraged by what my hon. Friend says. I had formed the impression that the reaction to the proposals to give parents a majority on governing bodies had been almost universally hostile. We are considering all the responses, and I shall take into account what my hon. Friend says.

Mr. Andrew F. Bennett: Will the Secretary of State confirm that in the consultation document he talked a great deal about giving governors a much greater say in discussions about discipline in schools? Therefore, is it not unfortunate that the Education (Corporal Punishment) Bill says nothing about the role of governors or the whole question of discipline in schools?

Sir Keith Joseph: Corporal punishment is not the only form of discipline in schools, as the hon. Gentleman would soon tell me if I said otherwise. That whole issue is to be discussed later today.

Mathematics

Mr. Alan Howarth: asked the Secretary of State for Education and Science what recent representations he has received concerning methods of teaching mathematics; and if he will make a statement.

The Parliamentary Under-Secretary of State for Education and Science (Mr. Bob Dunn): It is now exactly three years since the publication of the Cockcroft report on the teaching of mathematics. We have received many expressions of support for the recommendations of that report, and are continuing to encourage improvements in mathematics education in line with them.

Mr. Howarth: Will my hon. Friend take steps to ensure that, as a result of the proposals by the Inner London education authority to introduce into schools from next September the teaching of what it calls anti-racist mathematics, pupils are not diverted from the proper study of mathematical concepts to the study of tendentious political concepts?

Mr. Dunn: The job of any mathematics teacher anywhere is to teach mathematics as effectively as possible to all his pupils, taking account of their background and experience. It is for individual schools and teachers to decide how best to teach, but their work should never be impeded by the intrusion of a political viewpoint. Mathematics is mathematics whatever the ethnic origin of the child to whom it is taught, and it should be the same for all.

Dr. M. S. Miller: Are not mathematics teachers still among the scarcest commodities in education?

Mr. Dunn: The shortage of qualified mathematics teachers is a long-standing problem, but the position has

improved. In recent years the supply of new teachers has been healthier, and there are now many fewer unfilled vacancies.

Mr. Patrick Thompson: Does my hon. Friend agree that the need for improved standards in mathematics teaching, and the need for improved recruitment of mathematics and physics teachers, makes it all the more urgent that the talks on the restructuring of teachers' pay should be successful? Does he further agree that we must be flexible and imaginative in our pursuit of this worthwhile aim?

Mr. Dunn: I am sure that my right hon. Friend has heard what my hon. Friend said. All children need to learn the basic number facts, as the Cockcroft report says. I condemn political interference. It must be condemned, as it cannot in any way be helpful to the children whom it is supposed to serve.

Special Education

Mr. Dormand: asked the Secretary of State for Education and Science if he will make a statement on the progress made in special education following the issue of the Warnock report and the subsequent Education Act.

Mr. Dunn: Local education authorities have established new procedures for assessing children with special educational needs, and most authorities are reviewing the provision made for them. There have been a number of initiatives in teacher training, both by my right hon. Friend and by local authorities. My right hon. Friend has approved 85 independent schools for the purpose of the 1981 Act, and a number of others are under consideration. He has commissioned four new research projects, and has included the provision of microelectronic aids for handicapped children in the educational support grant programme for 1985–86.

Mr. Dormand: In spite of what the Minister has said, is he aware that there is considerable anxiety among educationists about the slow progress being made in implementing the Act? Does he realise that a massive injection of resources is necessary if the objectives of the report and the Act are to be met? Is he further aware that perhaps even more important is the need for a genuine desire on the part of the Government to do something about this important development in special education, but that there is very little sign of it so far?

Mr. Dunn: We always made it clear during the passage of the Bill that integration and development would take place as resources permitted. According to returns from schools, the number of children ascertained as handicapped in ordinary schools rose from 29,976 in January 1982 to 37,970 in January 1983. There has been real progress.

Mr. Key: Will my hon. Friend examine the role of hospital special schools? Most parents and teachers seem to be unaware that there is a national network of hospital special schools which can provide vital continuity for children who are hospitalised.

Mr. Dunn: I undertake to inquire into my hon. Friend's question.

Mr. Freud: Does the Minister accept that 84 per cent. of children who are assessed as having a special


educational need are still in unintegrated schools? Will he try to do better and, above all, examine local education authorities which are out-performing others to see whether he can learn something from them?

Mr. Dunn: As the hon. Gentleman said, there is a problem in that regard, but there will always be some people in those circumstances. Under the 1981 Act, parents have a right of appeal to the Secretary of State against a decision by a local education authority not to make a statement of special educational needs. That is of real value for parents.

Mr. Hannam: Has my hon. Friend seen the Advisory Centre on Education report, which shows that 54 per cent. of local education authorities which were interviewed still, last year, had not developed any policies for the implementation of the 1981 Act? Will he consider carefully the working party's recommendation for a national advisory committee to give advice and information and to monitor local education authorities?

Mr. Dunn: I can give no such undertaking in regard to my hon. Friend's latter point. However, I undertake to inquire into the other points that he has made.

Mr. Jim Callaghan: Does the Minister agree that, to date, very few teachers have been sent on in-service training courses to implement the Warnock committee's recommendations and to meet the requirements of the Education Act 1981? What does he intend to do about that?

Mr. Dunn: I do not entirely agree with the hon. Gentleman. A wide range of in-service training is available for teachers who are responsible for the education of children with special educational needs. The arrangements are set out in circular 4/84, which allows local education authorities to claim about £2 million for that purpose in the academic year 1984–85.

Mr. Robert Atkins: In spite of the heartening trend to which my hon. Friend has referred, does he accept that in still too many schools in various parts of the country youngsters whose physical handicaps are of an almost extreme nature—particularly diabetes or arthritis—but which do not prevent their brains from working to the same standard as children in ordinary schools are being disadvantaged? Will he continue to keep up the pressure?

Mr. Dunn: I undertake to do just that. I remind the House that we have always said that full implementation of the Act will be a gradual process. The Warnock committee saw the perspective as extending to the end of this century.

Mr. Andrew F. Bennett: Will the Minister confirm that, in the White Paper, the Government envisage spending less on specialist schools, and that the whole concept of the Warnock report is being discredited because resources are not being made available in ordinary schools to cope with the increasing number of children who are being integrated?

Mr. Dunn: The hon. Gentleman is wrong. The Government's expenditure plans do not envisage reductions in expenditure on special education.

Student Unions

Mr. Merchant: asked the Secretary of State for Education and Science if he will review the present arrangements for compulsory membership of student unions.

The Parliamentary Under-Secretary of State for Education and Science (Mr. Peter Brooke): The arrangements are governed by the provisions of charters and statutes, or articles of government, under which membership of student unions is automatic. The provisions can be amended only at the initiative of the governing bodies of the institutions concerned, or by legislation. My right hon. Friend does not at present intend to introduce such legislation, but the matter is under active review.

Mr. Merchant: Apart from the strong ethical arguments in favour of voluntary membership of student unions, would there not be a considerable saving of public money from the change of student union membership to a voluntary nature, in that they would be founded on voluntary subscriptions by membership rather than by compulsory subscriptions by the taxpayer?

Mr. Brooke: I rest on my original answer about the integral part of a student union in its institution. The point about savings comes back to welfare, sports and social services provisions, and whether that should be a proper part of university and polytechnic activity.

Mr. Rhodes James: Will my hon. Friend reconsider that answer?

Mr. Brooke: I am clear that this is a matter of concern to my hon. Friends, and any matter of such concern is automatically a matter of concern to my right hon. Friend and myself.

Mr. Shearman: Is it not interesting that there is yet another attack on young people in this International Year of Youth? I am sure the Minister is aware that membership of the National Union of Students is not compulsory, so will he please tell his Back Benchers that? The National Union of Students of each separate college votes on whether or not it will affiliate to the NUS. Is the Minister aware that there have been ballots of all NUS members in Newcastle, Hatfield, Aston and Reading this year, and overwhelmingly the members said that they wanted to belong to the NUS?

Mr. Brooke: I hesitate to correct the hon. Gentleman, but the question that I have answered is not about the NUS.

Religious Education

Mr. Peter Bruinvels: asked the Secretary of State for Education and Science if he is satisfied with the manner in which the provisions of the Education Act 1944, as they relate to morning assembly and religious education in schools, are being carried out by schools and by local education authorities.

Mr. Dunn: We have made it clear that we look to local education authorities and to the schools to ensure that the legal requirements are met. My right hon. Friend is concerned that there may be schools where those requirements are being breached, and is always prepared to look into complaints from parents or others on this matter.

Mr. Bruinvels: I thank my hon. Friend for that reply. Does he agree that far too many schools are abusing the system and not teaching the true religious denomination, language and history of Christ? Therefore, will he confirm that it is the Government's policy to maintain a strong commitment to the Education Act 1944 as relates to the provision of religious education throughout all schools?

Mr. Dunn: The religious education provisions of the 1944 Act are part of the settlement between the churches and the state which underpins that Act. At present, we have no intention of proposing any changes to those provisions.

Ms. Clare Short: Is the Minister aware that in many schools, and certainly in schools in my area, there are children from all the great religions—Sikh, Muslim, Catholic, Jewish, Jehovah's Witness and Pentecostal—and that the schools are attempting to get the children to respect each other's religions, which is a fine move? Is he further aware that any attempt to prevent such an assembly would be a reactionary move?

Mr. Dunn: Religious education in county schools has to be provided in accordance with an agreed syllabus which has been drawn up locally. A number of local education authorities have recently revised their agreed syllabuses. I hope that more will do so. They can take an opportunity then to draw upon the full range of religious faiths in their communities. However, I expect such a syllabus to contain an introduction to the Christian tradition, and that should be a central part of religious education in this country.

Mrs. Rumbold: Does my hon. Friend agree that, although the law is as written in the Education Act 1944, it is a sad fact that a number of schools do not have morning assembly? Notwithstanding the points that the hon. Member for Birmingham, Ladywood (Ms. Short) made, it is possible to start the day with an assembly encompassing many different religions. Is it not a shame, therefore, that we do not ask schools to do so?

Mr. Dunn: My right hon. Friend and I would deplore any attempt by any school to abolish daily worship.

Higher Education

Mr. Fisher: asked the Secretary of State for Education and Science when he now expects to publish his Green Paper on higher education.

Sir Keith Joseph: Later this year.

Mr. Fisher: Will the Secretary of State consider the latest report of the central services unit, which shows that there are 3,000 fewer university graduates this year and, most damagingly, 600 fewer university graduates in science and technology? Is that not a direct result of the Government's cut in 1981 of money to universities strong in applied sciences, (such as Salford and Aston? Will not further harm be done by his decision last year to cut money for scientific research? What will he do about it?

Sir Keith Joseph: I would be more impressed by the hon. Gentleman if he had stated the full facts. There has been an increase of 60,000 places in higher education, with an enormous increase since 1979, and the increase in polytechnic places far outnumbers the small fall in university places. I would also be more impressed if the

hon. Gentleman, in referring to science expenditure, had explained that the reduction was simply a reduction in the increase that the Government had made available for science research. There is to be more science research next year than there was before.

Dr. Hampson: Is my right hon. Friend aware that the Green Paper will be very important for him if he is not to lose the battle of ideas in higher education? Is he further aware that, despite the many valuable improvements that he has initiated, a distinctly hostile atmosphere is building up in universities and polytechnics, to the point at which apparently only one in five is now sympathetic to the Conservative party?

Sir Keith Joseph: My hon. Friend may be a little romantic about the number who supported us before. I very much hope that the intelligent population in higher education will take account of the relatively poor economic performance that the country has achieved in recent decades. It is improving now, but it is still relatively disappointing. Therefore, they must look other than to the taxpayer for increasing even those small proportions of their funding.

Dr. Bray: Is the Secretary of State aware that, despite what he says, lack of funding is rapidly eroding basic science? Is he further aware that that is the advice of his own senior scientific advisers? What plans or proposals has he to make good the life support which he regarded as essential for the maintenance of basic science for just one year, which he then halved because of the student grant disaster?

Sir Keith Joseph: The hon. Gentleman is wrong on several counts. The Government reduced, but did not halve, the increased allocation. The hon. Gentleman should acknowledge that the Government have given a special increase for science research in the increase that was recently announced, including a necessary improvement in the unfortunately obsolescent provision of equipment in a number of universities. It is necessary that more should be provided for basic science and science research, and that process was begun this year.

Student Grant

Mr. Nellist: asked the Secretary of State for Education and Science by what percentage the real value of a student grant is different from the level which would be paid had its value been increased since 1965 by (a) the rise in retail prices and (b) the rise in average industrial earnings.

Mr. Brooke: In 1984–85 the real value of the student grant was equal to 87 per cent. and 61 per cent. of its 1965 level when compared with increases in retail prices and average earnings respectively.

Mr. Nellist: Does the Minister agree that the cuts in the real value of grants in the past five to six years by the Government of whom he is a member have had an adverse effect on the right of working-class students to enter higher and further education, especially mature students? [Interruption.] Does he also agree that that right has been restricted by the value of the grant, which the Government have cut repeatedly? Does he accept that provision for the education and maintenance of students should be more firmly back in the hands of the state, where it belongs, and not increasingly put on the backs of parents?

Mr. Brooke: The statistics depend always on the base year. If the hon. Gentleman were to take 1970 as his base year, when the previous Conservative Government took office, he would find that the reduction has been only to 97 per cent.—it had almost held its ground. The hon. Gentleman spoke about working-class families. He will be aware that 30 per cent. of the mandatory awards that are subject to means-testing are full grants, which go to families with two children which are on two thirds of average national earnings.

Mr. Pawsey: Will my hon. Friend advise the House by how much spending on student grants has increased since 1979?

Mr. Brooke: My hon. Friend is right to draw the attention of the House to the fact that 60,000 additional students have greatly increased the amount that is spent on student support.

Mr. Wilson: Does the Minister accept that by quoting the lowest standard of 1970 as an example he has not done his case any good? Whichever angle is taken, the statistics show that the grant is basically inadequate and should be increased in the coming year.

Mr. Brooke: I acknowledge that the grant is at a lower level than it has been historically. However, taxpayers' interests have to be taken into account as well as those of students. The fact remains that a larger proportion of the relevant age group are choosing to go into higher education than ever before.

Mr. Forth: Does my hon. Friend agree that many of the arguments about student grants could be eliminated if we adopted a system of student loans, whereby adults of 18 years or over could obtain a loan from society which they could repay in compensation for the benefits that they received from higher and further education?

Mr. Brooke: My hon. Friend will know that my right hon. Friend the Secretary of State announced on 5 December that the Government would be conducting a review of student awards, and loans will be on the agenda of that review.

Mr. Freeson: When will the Secretary of State implement the proposals, which have been in and out of his Department for the past 10 years under successive Governments, on the introduction of a mandatory grant for all prospective students between the ages of 16 and 19 years? If the proposals cannot be implemented in the immediate future, what action will be taken within the coming months to enlarge and increase the scope of discretionary grants, which require more resources being given to local education authorities?

Mr. Brooke: The sum involved in meeting the right hon. Gentleman's request would be about £600 million. That is not within the Government's present gift or disposition. Secondly, if the Government were to make more money available to local education authorities for the funding of discretionary grants, they would not be able to control how the money would be spent, because discretionary grants are, by their very title, discretionary.

Mr. Tony Lloyd: Despite the laughter of Conservative Members when my hon. Friend the Member for Coventry, South-East (Mr. Nellist) spoke about the access of working-class students to universities and higher education, is it not a fact that Britain does badly in giving

access to children from that background to our universities and other higher education establishments? Is it not a fact also that the level of student grant has declined in real terms, which means that there is a stronger disincentive for students from a working-class background to enter higher education, thereby denying the opportunities that are given to the children of Conservative Members?

Mr. Brooke: I can only repeat the 30 per cent. statistic which I quoted previously, which I agree was calculated on an income basis. The fact remains—and here we do have a problem—that the classification and numbers in the various categories vary as social movement takes place.

Mr. Sheerman: Does not this deterioration fit into the pattern of the Government's intention and policy to depress the standards of living of young people wherever they are found, whether they are students, whether they are on YTS, whether they are in work or whether they are on supplementary benefit? Does not the decision that has obviously been taken to withdraw supplementary benefit from young people up to the age of 18 fit into this conspiracy against young people? The Minister can protest, but he and his hon. Friends came from privileged backgrounds. Is it not about time that some of the fat cats opposite stood up for the young people of the country?

Mr. Brooke: I have a sense that the hon. Gentleman, in that question, was trying to ask the question that he sought to ask me on a previous occasion, but I deny absolutely the charge that he makes.

Mr. McQuarrie: On a point of order, Mr. Speaker.

Mr. Speaker: Order. I will take points of order after Question Time.

Nursery School Nurses

Miss Maynard: asked the Secretary of State for Education and Science how many qualified nursery nurses are employed in nursery schools in England and Wales.

Mr. Dunn: In January 1984, in England, there were 10,639 qualified nursery nurses employed in all forms of education provision for the under-fives. Of that number, 1,836 were employed in nursery schools. Information for Wales is the responsibility of my right hon. Friend the Secretary of State for Wales.

Miss Maynard: Does the Minister agree that nursery education is very valuable for both the child and the parent and that it has been shown to be cost-effective in the long term? Should not the Government be expanding nursery education rapidly in view of the empty classrooms and the large number of unemployed nursery nurses?

Mr. Dunn: I have to tell the hon. Lady that many local education authorities are using surplus classrooms to that very end. I must remind the House that it is for local education authorities to decide what education facilities to provide for the under-fives in the light of local needs and resources and their own local priorities.

Essex (Education Standards)

Dr. McDonald: asked the Secretary of State for Education and Science if he is satisfied with the standards of primary and secondary education in Essex.

Sir Keith Joseph: The objective of Government policy is to bring about higher standards in all schools. I welcome Essex's efforts—as I do those of other authorities—in this regard.

Dr. McDonald: Is the Secretary of State aware that Essex spends less per pupil, particularly in the primary section of schooling, than the average non-metropolitan county? Is he also aware that Essex spends less on books and equipment — and that this spending is at a particularly low level — than the average non-metropolitan county? Before the Secretary of State tells me that spending has nothing to do with achievement, will he note from the statistics available that the O and A-level passes in Essex are below those that might be expected, given the social structure in Essex? If he is that concerned about the standards of education in Essex, will he encourage it to spend more on each child and on books and equipment?

Sir Keith Joseph: If the local authorities controlled by some of the hon. Lady's friends did not overspend so much, the Government would have been able to be slightly less stringent with some of those authorities, such as Essex, which have been prudent in their management.

Mr. Haslehurst: Is my right hon. Friend aware that there may be grounds for concern about whether effective use is being made of computers in rural primary schools and that this problem may also have arisen elsewhere?

Sir Keith Joseph: I am sure that my hon. Friend is right. That is why the Government are providing some money through education support grants for the reinforcement of education in rural primary schools.

Mr. Radice: Is the Secretary of State aware that many parents in Essex, as in other local authority areas, are now paying for essential items such as books, materials and equipment? Does he agree that that is entirely contrary to the spirit of the 1944 Act? Will he also rebut reports that in Chester he suggested that when parents were making such payments the local authority should reduce the capitation allowance accordingly?

Sir Keith Joseph: I should be very concerned if any such parental contributions were other than strictly voluntary.

Adult Education

Mr. Freud: asked the Secretary of State for Education and Science whether he will make a statement on the current level of and trend in the provision of adult education classes?

Mr. Brooke: Figures of enrolments at local authority adult education centres in England for November 1983 show a rise of some 7 per cent. since November 1981. Enrolments for courses provided by the responsible bodies have similarly risen in recent years.

Mr. Freud: Does the Minister accept that the imposition of VAT on some evening classes undermines his party's commitment to adult education? In view of the negligible income involved and its substantial deterrent effect, will he have a word with the Chancellor with a view to eliminating the VAT charge?

Mr. Brooke: As the hon. Gentleman suggests, this is more a matter for my right hon. Friend the Chancellor. I

think that it is generally accepted throughout the adult education service that the effect of the Customs move on VAT has been far less severe than was feared a year ago, before the guidelines were issued and implementation began.

Mr. Dorrell: In view of the prevailing interest in removing rigidities in the labour market, will my hon. Friend consider carefully the opportunities presented by adult education to improve the educational attainment for many people now unemployed and thus improve their job opportunities by improving the match between supply and demand in the labour market?

Mr. Brooke: I entirely endorse what my hon. Friend says. Indeed, it was with that purpose in mind that the Department launched the "Replan" initiative for the adult unemployed.

Student Loans

Mr. Andrew F. Bennett: asked the Secretary of State for Education and Science if he will publish the working papers from his Department's inquiry into student loans carried out during the last three years?

Mr. Brooke: No. These are internal Government papers, which are not for publication.

Mr. Bennett: Why are the Government afraid to put that information before the public? Is it because it shows that loans would not work and would have considerable implications in terms of increased public expenditure?

Mr. Brooke: I have every confidence that the same kind of considerations that were taken into account before 1983 will be considered again in the review during the coming year.

Teachers (Pay)

Mr. Madel: asked the Secretary of State for Education and Science what representations he has received from the local education authorities and the teachers' trade unions in relation to the proposed new salary structure for teachers; and if he will make a statement.

Sir Keith Joseph: The proposals for salary structure reform were made by the local authority employers. A number of organisations and individuals have sent me their views on various aspects of the proposals.

Mr. Madel: Is it now accepted by the local authorities and the teachers' unions that assessment of the performance of a teacher depends very much on the needs and circumstances of the school at which he teaches and that the Government expect that to be incorporated in any new salary structure?

Sir Keith Joseph: I really cannot answer that question. I do not know whether that is widely accepted. The proposals were made by the local authority employers and, while I approve of the general drift and some of the details, I am not associated with the offer itself.

Mr. Nellist: If the Secretary of State forced through his proposals for assessment and appraisal of teachers, would the teachers being appraised have the right to see and to criticise the reports made on them? Would they also have the right to appeal against them and, if so, to whom?

Sir Keith Joseph: I am glad that the hon. Gentleman asks such relevant questions. It is to discuss all the options, including those mentioned, that the Government wish to encourage evaluations of different forms of appraisal, and stand o ready with public money to finance such experiments.

Basildon (Ministerial Visit)

Mr. Amess: asked the Secretary of State for Education and Science if he will make a statement on the visit to Basildon of the Parliamentary Under-Secretary of State, the hon. Member for Dartford (Mr. Dunn) on 10 December.

Mr. Dunn: As my hon. Friend knows, I went to Basildon at his invitation for what proved to be an interesting meeting with local school teachers and governors about the Green Paper on school government. The hon. Member for Dartford had a most enjoyable time during his stay in Basildon.

Mr. Amess: Does my hon. Friend agree that the meeting in Basildon to discuss the Green Paper proposals on parental influence in schools clearly shows that we already have many able parents as governors? Will my hon. Friend stand by his proposals to increase the influence of parents in the running of schools?

Mr. Dunn: My first-hand contact with teachers and governors at the meeting led me to form a most favourable impression. Inasmuch as I bless good practice anywhere, I certainly welcomed it in Basildon.

Oral Answers to Questions — PRIME MINISTER

Engagements

Mr. Kilroy-Silk: asked the Prime Minister if she will list her official engagements for Tuesday 22 January.

The Prime Minister (Mrs. Margaret Thatcher): This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House I shall be having further meetings later today.

Mr. Kilroy-Silk: If, as the Prime Minister said on Tuesday, Britain is still worth investing in, when will the right hon. Lady put her money where her mouth is and invest more in jobs and people?

The Prime Minister: Last year there was an all-time record of investment of £55 billion in the United Kingdom, and that seems a very good earnest of faith in Britain and a good return on investment for people who invest here.

Mr. Rost: Will my right hon. Friend reaffirm her respect for the increasing flood of working miners who are fighting to save what is left of their industry after the disastrous NUM leadership has tried to ruin it?

The Prime Minister: Yes, gladly. The working miners have given first-class leadership, demonstrated courage and bravery and done a great deal for their industry. They have kept the rest of industry going in Britain and kept the homes of Britain warm.

Mr. Kinnock: The National Union of Mineworkers has decided to expand the negotiating team to embrace the whole executive and has made a new offer to enter into negotiations without preconditions. Mr. Ian MacGregor

has said that he wants resumed negotiations. In view of those developments and the £4 billion cost of the dispute so far, why is the Prime Minister's Office giving briefings to the press saying that the Government do not favour a return to talks until more than 50 per cent. of the miners have been driven back to work?

The Prime Minister: I noticed the offer of talks, allegedly without preconditions. I noticed also what the leader of the NUM said at the same time as that offer was made. He said that his aim was what it was at the start of the dispute, that the industry should not close pits on economic considerations: some lack of preconditions!

Mr. Kinnock: No preconditions means no preconditions. Why does the Prime Minister not test the strength of the undertaking by using her power to encourage a return to the negotiating table? Is it because she is afraid that there might be a settlement if that were undertaken? Is it the case, after all these months of strikes and with new opportunities now existing, that her cynicism and vindictiveness have overwhelmed all sense of duty?

The Prime Minister: If the right hon. Gentleman really wants an end to this strike, as I do, he can achieve that in two ways. First, he can ensure that the NUM withdraws its impossible demand that no uneconomic pits shall close—that is a point on which seven rounds of talks have foundered—and secondly, he can do so by the simple method of accepting the independent ACAS compromise settlement.

Mr. Kinnock: Will the Prime Minister now answer the question? Why does she not use the power that we know she has to test the strength of the undertaking that negotiations will be entered into without preconditions by encouraging the National Coal Board to go to those negotiations?

The Prime Minister: No, because I noted what the leader of the NUM said. He said:
My aim is what it was at the start of this dispute"—
Mr. Scargill said this on Sunday
that this industry does not close pits down on economic considerations.
If the right hon. Gentleman means without preconditions, perhaps he would advise the NUM to accept the ACAS agreement. Will the right hon. Gentleman — [Interruption.]

Mr. Speaker: Order. These are very serious matters of concern to the whole House. It is only fair that the Prime Minister should have an opportunity to answer the question.

The Prime Minister: Seven rounds of talks have foundered on the essential point that the leadership of the NUM has boasted that it has not budged an inch. As Mr. Eaton said yesterday, there is no point in going into a further round of talks only to fail.
If the right hon. Member for Islwyn (Mr. Kinnock) wants a further round of talks, the NUM should be advised to withdraw its impossible demand that no uneconomic pits should close. He should advise the NUM to accept the independent settlement recommended by ACAS — a body set up by the last Labour Government. He dare not do so.

Sir Anthony Grant: Will my right hon. Friend reflect on the fact that during the past year there were no fewer than seven rounds of talks—175 hours—during which


what many regarded as over-generous concessions were made by the NCB? Is she aware that in the opinion of the majority—certainly on the Conservative Benches—the only talks necessary now are for Mr. Scargill to talk to the NCB and accept the terms offered, as NACODS did in earlier negotiations?

The Prime Minister: ACAS was independent. It reached a compromise settlement, which the NCB accepted but which the NUM did not accept. The right hon. Member for Islwyn should urge the NUM to accept that settlement so that there can be an end to the strike.

Mr. Wareing: asked the Prime Minister if she will list her official engagements for Tuesday 22 January.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Wareing: Is the Prime Minister prepared publicly to commend the decision of the Soviet Union to enter the arms talks without preconditions? If so, why is she so opposed to the decision of the NUM to enter into talks without preconditions, despite its earlier position on the question of uneconomic pits? Is it not better to jaw-jaw than to war-war?

The Prime Minister: It is better to accept the independent ACAS settlement. Why does the hon. Gentleman refuse to do so?

Sir John Biggs-Davison: To be realistic, is it not inconceivable that any sane trade union leader should expect better terms from the NCB than those offered, and which are the envy of workers in other industries? Would it not be statesmanlike of the Leader of the Opposition if he were to advise his friends in the mining industry to bring this unnecessary dispute to an end so that the miners could accept the excellent terms offered?

The Prime Minister: Yes. As Mr. Michael Eaton, the Yorkshire area director, said this morning:
Our offer of no compulsory redundancies, guaranteed jobs, continuing major investment in the future of the industry and pay increases really is the best deal for miners than anything that has been available since nationalisation".
Some 77,000 members of the National Union of Mineworkers are not on strike. Well over 30,000 members of the National Union of Mineworkers have returned to work since the beginning of the strike, including 8,400 this year. They are accepting this best-ever offer.

Mr. Steel: Does the Prime Minister recall that last October, during the committal proceedings of Mr. Clive Ponting, the prosecution reported that no national security had been damaged by his actions? In view of that, why is he now being subjected to an East European style secret trial? Who took the decision to make it in camera—

Mr. Speaker: Order. I hope that the right hon. Gentleman will have regard to the sub judice rule.

Mr. Steel: I am asking about who took the decision that the trial should be held in camera and who took the decision that the jury should be vetted?

The Prime Minister: The full trial starts on Monday next, 28 January. As far as I am concerned, the matter is sub judice. The courts are independent of Parliament and must remain so.

Mr. George Robertson: asked the Prime Minister if she will list her official engagements for Tuesday 22 January.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. George Robertson: Will the Prime Minister care to take time to look at the weather map of the United Kingdom? Will she reflect on the fact that the regulations of the Department of Health and Social Security mean that the poor, the old and the sick who are freezing in the east midlands, west Wales, east Anglia and London are now to get help with their heating bills, but that those who are freezing in Scotland and the north, which today are blanketed in snow, are to get no help at all? Will the Prime Minister today give the order that these insane and insensitive regulations should be withdrawn forthwith?

The Prime Minister: Spending on heating additions — [Interruption.] The Opposition hate to hear this. It shows how bad their record was in practice. It reminds them that they tried to stop heating getting into homes. Now they are asking for extra grants. Spending on heating additions—I shall gladly answer the question—has risen by £140 million in real terms to £400 million this year. The value of heating additions is up by 40 per cent. more than the rise in prices. What the hon. Gentleman is referring to is on top of that excellent record. The particular regulation to which he referred, as my hon. Friend the Minister for Social Security made clear a week ago, is at present under review.

Mr. Couchman: During her busy day, has my right hon. Friend had time to read the report stating that the European Parliament is to consider the tattooing of domestic pets? Will she confirm that this will be a complete waste of time by this body and will she confirm that this country will have nothing whatever to do with it?

The Prime Minister: I thought it was absolutely ridiculous. I hope that the European Assembly has something better to do with its time than that.

Mr. Wilson: Will the Prime Minister now answer the question put to her by the hon. Member for Hamilton (Mr. Robertson): why should additional heating allowances be given to the people of southern Ireland [Laughter.]

Mr. Speaker: Order. We all make mistakes.

Mr. Wilson: —to the people of southern England, deprived though they are? Does she not realise that people in Scotland have greeted with incredulity and resentment the announcement made yesterday by her right hon. Friend that large areas of England are to be given these allowances? Is the Prime Minister's message to the people of Scotland that so far as she is concerned they can shiver and die of cold?

The Prime Minister: That is nonsense, and the hon. Gentleman knows that it is nonsense. The ordinary heating additions and, indeed, the extraordinary heating additions, amount to some £400 million this year, of which £200 million are paid to pensioners. Of course, the people of Scotland fully participate in and fully receive those heating benefits. What the hon. Gentleman is talking about is additions to the £400 million, which are distributed on the same basis—an extra single payment that is distributed when certain objective tests are reached. The hon. Gentleman does not like those objective tests, but they are laid out for everyone to see and to ensure that that regulation is fairly administered. The hon. Gentleman does not like the objective tests. The whole question of the


single payment legislation is being considered and reviewed at the moment by my right hon. Friend the Secretary of State for Social Services.

Mrs. Currie: asked the Prime Minister if she will list her official engagements for Tuesday 22 January.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mrs. Currie: Has my right hon. Friend noticed the considerable lightening of the atmosphere of East-West relations following the recent talks in Geneva? When she visits President Reagan in the near future, will she take with her the message that the British people have a strong

desire for peace and wish to see a substantial reduction in arms expenditure by East and West and a reduction in the armaments that are currently stockpiled?

The Prime Minister: Yes, we very much welcome the talks between Secretary Shultz and Foreign Minister Gromyko. We welcome the results. There is a long way to go on settling the agendas and deciding the forums in which those talks will take place. We wish them well. Our policy is one of balanced and verifiable arms reduction and we hope to achieve a reduction in the amount spent on weaponry, provided that we always keep balance and verification.

Questions to Ministers

Mr. Dennis Skinner: On a point of order, Mr. Speaker.

Mr. Dave Nellist: On a point of order, Mr. Speaker.

Mr. Tam Dalyell: On a point of order, Mr. Speaker.

Mr. Speaker: Order. Unless the points of order rise directly out of Question Time I shall take them later.

Mr. Dalyell: During a supplementary question by the leader of the Liberal party, Mr. Speaker, you referred to the use of the sub judice rule in relation to the Ponting trial at the Old Bailey. That has been interpreted with some considerable elasticity. Are questions to the Attorney-General on the criteria for vetting the jury out of order? Is it out of order to ask questions about the role of the Secretary of State for Defence in the trial? Are we to believe that all that is now sub judice and cannot be mentioned in the House of Commons?

Mr. Speaker: Allow me to clear up this important matter. The case itself is within the sub judice rule. It is a matter awaiting adjudication in a court exercising a criminal jurisdiction. The issue of the vetting of the jury for the trial is sub judice because the security aspects of the case are all-important. For the House to discuss any facet of them could be held to be prejudicial to the conduct of the trial.

Mr. Ivor Stanbrook: Further to that point of order, Mr. Speaker. Is it not reprehensible and an abuse of the rules of the House for the right hon. and learned Member for Aberavon (Mr. Morris) to complain publicly on the BBC this morning that you had not allowed him to put a private notice question on that matter which, in any event, is sub judice?

Mr. Speaker: Order. The right hon. and learned Gentleman has apologised to me for that matter.

Mr. John Morris: Further to that point of order, Mr. Speaker. If I in any way transgressed the rules of the House, obviously I would be the first, as you know, to express my regret to you and to the House. But as I told you, I was unaware that one was not able to refer to the fact that a private notice question had been disallowed. It is the first time that I have heard that rule.
Having said that, there are matters of importance that do not touch the sub judice rule—matters referred to by my hon. Friend the Member for Linlithgow (Mr. Dalyell), such as the conduct of the Secretary of State for Defence and the assurances given by the Attorney-General to the House that he would have jury vetting only upon the recommendation of the Director of Public Prosecutions. In the meantime, we read reports that the Director has not made such a recommendation and in those circumstances there would appear to be a breach of the assurance given by the Attorney-General. If I am wrong, should not the Secretary of State and the Attorney-General be given the opportunity to state their position?

The Attorney-General (Sir Michael Havers): Further to that point of order, Mr. Speaker. The House should know the real facts. The Director of Public Prosecutions

asked me for permission to vet the jury at the end of last week, and I consented to that request. The defence solicitor has applied for a copy of a document prepared by Mr. Ponting, which sets out the events leading up to the sinking of the Belgrano. He recognised that certain parts of the document might involve intelligence information and was prepared to accept a bowdlerised version. Such a version would be extremely misleading. I sought permission from Ministers concerned with the national security in the document for permission to use the whole document, but in camera.

Mr. Skinner: On a point of order, Mr. Speaker.

Mr. Speaker: Order. As is my normal practice, I shall take points of order at the end of the statements, unless they arise directly from Question Time.

Mr. David Steel: Further to that point of order, Mr. Speaker. Surely the Prime Minister should have given me that answer when I asked my question. It is quite wrong— [Interruption ] I asked a straight question after you rightly warned me about the danger of breaking the sub judice rule. My question was in order and the Prime Minister refused to answer it. It is quite wrong to have to continue this matter with points of order at the end of Question Time.

Mr. Skinner: rose—

Mr. Speaker: Order. I shall take points of order on other matters later.

Mr. Dick Douglas: Further to that point of order, Mr. Speaker. We are already seeing that the procedures of the House are flexible. We have heard the Prime Minister in answers to questions from the Leader of the Opposition about the miners' dispute give a clear indication of the Government's role in and views about the dispute. Have you received any request either from the Secretary of State for Energy or the Secretary of State for Employment to come and show clearly to the House their role in the dispute in giving advice or support to the National Coal Board? If you have not, would you consider what powers you have or what role you can play to ensure that the issue is properly ventilated in the House?

Mr. Speaker: Order. The hon. Member is making points of order very flexible by seeking to prolong Question Time with such a question. We had this at some length last week. I am not responsible for statements from the Government Front Bench, but for ensuring that Back Bench Members have an opportunity to put their questions, and I discharge that duty. Mr. Skinner.

Mr. Skinner: On a point of order, Mr. Speaker—

Mr. Norman Atkinson: Further to that point of order, Mr. Speaker.

Mr. Speaker: Order. I called Mr. Skinner, and he has as much right as the hon. Member to speak.

Mr. Skinner: Stranger things will happen before we are done. Mr. Speaker, you will have heard during the exchanges between the Leader of the Opposition and the Prime Minister that the question of the talks about the coal strike was so important that the Tory Government felt it necessary to call upon Tory knights to defend the Prime Minister. In view of the fact that the short debate began, would you look favourably on the idea of extending that


debate when Standing Order No. 10 applications are made later, so that those who were interested in the opening rounds can continue the debate about the miners later?

Mr. Speaker: That is an extremely hypothetical question.

Mr. Atkinson: Further to that point of order, Mr. Speaker. I was by no means claiming precedence over my hon. Friend the Member for Bolsover (Mr. Skinner). I wish to raise a question arising from the statement that you made to the House, in which you said that you were satisfied that the security matters involved in the Ponting case were extremely sensitive. Have you examined all those papers to ensure that you are satisfied, or are you taking instructions from the Attorney-General, who suggested—

Mr. Speaker: Order. That is a wholly unworthy comment from an hon. Member with the experience of the hon. Member for Tottenham (Mr. Atkinson).

Mr. Atkinson: It is by no means an unworthy comment from myself—[HON. MEMBERS: "Withdraw."] I will certainly not withdraw anything, following the yapping of Conservative Members. All of us here have an equal responsibility to ensure that the rights of Back Bench Members and of the House are protected, but Mr. Speaker has ruled that we must be prevented from discussing those important matters. Some of us believe that he has accepted, on the surface and without examination, the fact that sensitive matters are involved that may not be discussed by the House. I am asking the simple and genuine question: are you satisfied, Mr. Speaker, from your examination, that these matters are, as the Attorney-General claims, too sensitive for the House to discuss?

Mr. Speaker: Order. First of all, I say to the hon. Gentleman that I take instructions from absolutely nobody. Secondly, I must tell him that my responsibility in such matters is to ensure that the sub judice rule is not breached, in order that those who are in the courts will not have their trials prejudiced. That is a responsibility that every hon. Member should discharge equally.

Mr. Dalyell: Further to that point of order, Mr. Speaker. Does that mean that questions to the Attorney-General about the criteria for vetting are out of order? Further, it will be within your recollection, Mr. Speaker, that on 9 October at Bow Street magistrates' court, Mr. Roy Amlot, on behalf of the prosecution, said that no security issues were involved. Can Parliament be told what has happened between 9 October and late January to make the position different?

Mr. Speaker: I have looked carefully into the application of the sub judice rule to this case, and I am satisfied that my ruling is correct. I cannot go beyond that.

Mr. Gavin Strang: Further to that point of order, Mr. Speaker. The whole House listened with great care to the answer that you gave to my hon. Friend the Member for Linlithgow (Mr. Dalyell) on the crucial question of the operation of the sub judice rule in this case. Did your answer rule out the decision to hold the trial in secret? You covered the case and the vetting of the jury, but is the House debarred from discussing and voting on the decision to hold the trial in secret?

Mr. Speaker: That is clearly not a matter for me.

Mr. John Ryman: Further to that point of order, Mr. Speaker. I do not wish to prolong this matter, but surely it is only for the trial judge to decide, upon the application of the Crown, whether the trial should be held in secret. Will not the trial judge make that ruling after hearing submissions from the Crown and the defence?

Mr. Speaker: That may be the factual case. As I said to the hon. Member for Edinburgh, East (Mr. Strang), it is not for me to decide whether the case should be heard in secret.

Dr. David Owen: Further to that point of order, Mr. Speaker. We must be clear about what the Attorney-General is saying. Did he rise on a point of order, or is what he said open to questions? We were told about only one aspect of the dialogue with Mr. Ponting's solicitors. After the bowdlerised version was requested and that request turned down by the Attorney-General, were Mr. Ponting's solicitors consulted before the decision was taken to reveal the full document and to hear the entire case in camera? Those are detailed questions. What surprised many people was that the Attorney-General went as far as he did on a point of order, and now seems to have closed down further questions on what he said.

Mr. Speaker: The House will have heard the Attorney-General say, "Further to that point of order." That phrase is not a statement and, although the matter could, on a subsequent occasion, be subject to questioning, it is not this afternoon.

Mr. Strang: Further to the point of order I raised earlier, Mr. Speaker—and I am grateful for your indulgence—may I ask whether the House is to be allowed to express a view on the decision to hold the trial in secret?

Mr. Speaker: Not on this matter at this moment. There are other methods of drawing attention to the issue; I notice that there is an early-day motion on the Order Paper today dealing with the general issue. I have this afternoon simply given a factual ruling on the specific matter in the courts.

Mr. John Morris: rose—

Mr. Speaker: After hearing the right hon. and learned Member for Aberavon (Mr. Morris), the Shadow Attorney-General, we shall have to move on.

Mr. Morris: Further to that point of order, Mr. Speaker. The House will be grateful, despite my failure to obtain permission to table a private notice question, that the Attorney-General has at last risen to his feet to clarify some of the issues. It will be within your recollection, Mr. Speaker, that I sought to table a question and to obtain guidance from you many weeks ago regarding the sub judice rule on another matter and you ruled that I could not raise those matters. Subsequently, in the course of an exchange in the House, the Attorney-General spelt out in detail precisely the matters that I was not able, on your ruling, to raise with him. In view of that, is it not high time that the sub judice rule was examined to ensure that it applies equally to all hon. Members of the House?

Several Hon. Members: rose—

Mr. Speaker: Order. I do not propose to take any further points of order on this matter. To answer the right


hon. and learned Member for Aberavon—I am surprised that he does not know this with regard to private notice questions and I will reaffirm the position for the benefit of the House—it is not part of our conventions that the refusal of, or even application for, a private notice question is mentioned in the Chamber. And if it is not mentioned in the Chamber, it is certainly not mentioned on the radio. I hope, therefore, that what occurred will not happen again.
Regarding the sub judice rule, I take careful advice on what matters are sub judice, and the position is absolutely clear. The rule is designed to ensure that those who may be before the courts have their rights protected. It would be wrong—I am sure that the whole House accepts that it would be wrong—if anything said here prejudiced a trial. The House would not want that and we should not allow it.

Brighton Bombing (Hoddinott Report)

The Secretary of State for the Home Department (Mr. Leon Brittan): With permission, Mr. Speaker, I should like to make a statement about the conclusions of the inquiry into security arrangements for last year's Conservative party conference.
On 22 October last year, I made a statement about the explosion at Brighton. Police investigations into that crime are still continuing. The evidence so far obtained suggests that the explosion was caused by a device containing between 20 and 30lb of explosive placed behind a bath panel in room 629 on the sixth floor of the Grand Hotel. It was almost certainly detonated by a long delay timer.
The police have made exhaustive inquiries about staff and guests at the hotel. They have established that someone who stayed in room 629 for three days about three weeks before the explosion had given a false address. Inquiries to trace him and other inquiries related to electronic devices recovered from the debris are continuing. The House will not expect me to go into further details about them.
In my statement last year, I told the House that the chief constable of Sussex had asked Mr. Hoddinott, the deputy chief constable of Hampshire, to investigate the security arrangements in place at the time of the conference. I have now received and studied a copy of his report. It cannot, for reasons of security, be published, but I have placed in the Library of the House a summary, which Mr. Hoddinott has confirmed gives a fair and accurate account of his findings. Copies are also available in the Vote Office. I understand that the Sussex police authority is meeting to discuss the report with the chief constable tomorrow.
Mr. Hoddinott has conducted a comprehensive and detailed inquiry into the plans and arrangements made for security at the conference and the efficiency with which they were carried out. The House will see from the summary that he has judged the performance of the Sussex police against the information which was available to them and the level of precautions which were then regarded as usual and acceptable to those concerned.
Mr. Hoddinott's general conclusion against that background is that the Sussex police made proper and reasonable plans and implemented them competently and professionally. He finds that they had access to all the relevant intelligence information up to the time of the explosion, and took proper account of it. He makes a number of detailed criticisms of the arrangements for communications within the Sussex force both of threat levels and the requirements for searches. He also criticises the adequacy of the co-operation between hotel management and the police.
Mr. Hoddinott paid particular attention to search procedures. He did not criticise the police for failing to control and search each person entering the hotel during the period of the conference. He concluded that the hotel and those wishing to use it would not have accepted such an arrangement and that, given the assumption of free access to the hotel, the numbers involved would anyway have made it impracticable. He stresses that it has hitherto always been the practice of the police to take the basic nature of the occasion to be protected as the starting point


for protection and security precautions, rather than to seek to change the nature of the occasion itself on security grounds.
Mr. Hoddinott found that it would not have been the practice of any police force in Great Britain or Northern Ireland to have conducted a full search of the entire hotel prior to the conference. The view would have been taken that, if it were to be fully effective, such a search would have taken some weeks, during which time the hotel would have had to be closed, with public access denied until the conference was over. Mr. Hoddinott's judgment is that on the basis of the procedures which then seemed reasonable and likely to be acceptable to those concerned, the Sussex police are not to be criticised for the fact that the bomb hidden on the sixth floor was not discovered.
Mr. Hoddinott was critical, however, of the inadequate search that was made of the first floor, which should under standard police procedures have been searched. The failure to do so adequately was caused by the absence of a clear allocation of responsibility within the Sussex police. Different and stricter arrangements for searching were possible at the conference centre, where the building was to a much greater degree taken over for the exclusive use of the Conservative party and was inherently easier to search.
Looking to the future, Mr. Hoddinott has not attempted to prescribe new policing arrangements, but he has, as the House will see from the summary of his report, drawn attention to a number of important areas where changes now need to be considered on a national basis. He also makes it clear, however, that a balance will always have to be struck between security and the conduct of political affairs in our open democratic society.
The House will recall that I announced in my statement last October that we had at that stage already set in hand new arrangements centrally both for assessing terrorist intentions and capabilities and for co-ordinating the counter-measures required to meet them. Those central arrangements are now fully in place and I believe that they have already proved their value.
However, many of the specific counter-measures are and will remain the responsibility of local police forces, with the Metropolitan police special branch having particular national responsibilities. To assist them in their task I am now setting up a new permanent working group. Its role will be to bring about successful co-ordination between police forces throughout Great Britain and also to ensure that they have available to them all relevant techniques and experience. This group, under Home Office chairmanship, will monitor the advice and techniques available for protecting targets and countering terrorist threats and will co-ordinate the promulgation of advice to police forces. It will include, in addition to the police, representatives of the security service and the Army. I have already arranged with my right hon. Friends the Secretaries of State for Defence, for Northern Ireland and for Scotland to involve the Army and the Royal Ulster Constabulary in training police officers from all mainland forces in search techniques and to ensure that full use is made of the relevant experience gained in Northern Ireland.
The chief constable of Sussex, after discussion with his police authority tomorrow, will take corrective action for the future on the specific criticisms of his own force

contained in the report, and the new working group will ensure that the points of general relevance are made to all chief constables.
Since the explosion at Brighton, the Metropolitan police have reviewed and increased the measures they take to protect members of the Cabinet and others who may be at particular risk. Mr. Hoddinott's report is bound also to lead us to consider afresh all the precautions that need to be taken for the major party conferences in 1985 and for similar major political events. Difficult decisions will have to taken about many matters relating to security, including the extent and manner of public access, the accommodation of political leaders subject to particular threat, pass systems and arrangements for stewarding meetings. These questions raise important issues about the cost and acceptibility of changes to established democratic traditions. The answers will not be the same in the case of each event, but I am sure that representatives of the political parties should participate in the process of resolving these issues. I have therefore asked Her Majesty's Chief Inspector of Constabulary, Sir Lawrence Byford, to head a team of chief constables and others to prepare urgently proposals for security at this year's party conferences and comparable occasions and I am writing today to invite party representatives to be involved actively in the work of this group.
I am most grateful to Mr. Hoddinott for the very thorough and professional way in which he carried out his task. He has given his assessment of what happened at Brighton, of the problems that now need to be tackled and the further questions that must be answered. As I said last October, total security is impossible in a free, democratic society, but in the light of Brighton we must enhance previously acceptable levels of security and equip ourselves to take in a clear-sighted way the difficult decisions involved in making any changes in the balance between security and the conduct of politics in a free society. I believe that the decisions that I have now taken will help significantly to enhance security and provide a firm framework for giving acceptable and practical answers to the outstanding questions.

Mr. Gerald Kaufman: The safety and security of Her Majesty's Government are matters which transcend party politics; it is that absolute principle which governs the response of Her Majesty's Opposition to the Home Secretary's statement. That being so, I have to say that, on behalf of Her Majesty's Opposition, I find it impossible to make any properly informed comment on what the Home Secretary has told the House. I am frankly astonished that access to the full Hoddinott report has not been made available to the appropriate representatives of Her Majesty's Opposition on Privy Councillor terms.
My right hon. Friend the Member for Morley and Leeds, South (Mr. Rees) assures me, as a former Home Secretary, that he would have arranged for such confidential access, especially as the Home Secretary acknowledges that this matter is of importance not merely to the Conservative party but to other political parties. Although it is entirely right and proper to involve the relevant party representatives in the activities of the working group which is to be set up, I would have expected the Home Secretary himself to discuss these matters with the appropriate representatives of the political parties that are represented in this House.
The Home Secretary's statement raises a number of disturbing matters. I pay tribute to the dedicated work of the police, the fire, the ambulance service and the other public services in Brighton three months ago. All of us owe them a profound debt for the hazards that they readily risked on behalf of the entire community. The police did to the very best of their ability all that they were asked to do, but they were not always given the right orders. We have heard of the inadequate search of the ministerial floor of the Grand Hotel. That is very worrying indeed.
The Home Secretary said that Mr. Hoddinott's judgment is that, on the basis of procedures that then seemed reasonable and likely to be acceptable to those concerned, the Sussex police are not to be criticised for the fact that the bomb hidden on the sixth floor was not discovered. However, the fact must be faced that, on the basis of the inadequate search, a bomb on the first floor might not have been discovered either. Also very worrying is the inadequate co-operation between the hotel management and the police. Without proper information, it is impossible to be sure, but I have to be convinced that it would have been out of the question to conduct a more thorough search, even if not a totally thorough search, of the other floors of the hotel.
While I accept that it would not have been possible to seal the entrances to the hotel and search thoroughly all who sought entrance, some searching of portable items could and should have been considered. After all, many shops and places of entertainment make the effort, even without the presence of members of the Cabinet on their premises.
Furthermore, I should have thought that it made sense to study the security practices in other countries that face comparable problems, to establish whether there are lessons that we can learn. From what has been made available to the House, I find the report inadequate and complacent. The secure continuance of the Queen's Government and political life in this country are fundamental to our democracy and the public requires better reassurance that it has been given this afternoon.

Mr. Brittan: I think that the right hon. Gentleman will want to reconsider what he has said in the light of full consideration of my statement, because he seems to have failed to understand that what I had to say was in two parts. First, I was giving the House an account of Mr. Hoddinott's report, which was made independently by a distinguished police officer, made essentially to the chief constable of Sussex, and for wider consideration as well. I then went on to give an account of the response to that report, which the right hon. Gentleman may not have fully appreciated.
I am sorry that the right hon. Gentleman regrets not having had access to the full Hoddinott report. I assure him that there is a precedent for the procedure whereby a document which on security grounds cannot be published is summarised and the summary is placed in the House. I also assure him that Mr. Hoddinott is satisfied that all the criticisms made in his full report are properly and adequately reflected in the summary, which I hope the right hon. Gentleman will study carefully.
What the right hon. Gentleman said about the deficiencies found by Mr. Hoddinott merely repeats what I said in my statement. Mr. Hoddinott did not say that a

more full search of the premises was out of the question. He merely explained why it did not take place and what the consequences of such a search would have been.
As to the experience of other countries, I assure the right hon. Gentleman that the group, set up with the wide membership to which I have referred, will have every opportunity to consider the experience of other countries, and will want to do that in its work. I assure the right hon. Gentleman that the Government's response in setting up this new and broadly based group and encouraging the participation of the political parties in the working out of practical, acceptable arrangements are for party conferences and other events in the coming months is a serious response to a situation the gravity of which I have no reason whatsoever to underestimate.

Mr. Julian Amery: Is my right hon. and learned Friend aware that his detailed and full statement will be widely welcomed in Brighton and the whole of Sussex? As it was a full and detailed statement, will he confirm two points that will be immediately in the minds of Brighton and Sussex people tonight? First, did the Sussex police co-operate fully in the inquiry and, secondly, subject to the inquiry now being conducted by the Sussex police, is there reason to believe that they fell down on their duty in any respect?

Mr. Britton: It is the case that the Sussex police cooperated fully in the inquiry, and I assure my right hon. Friend that the full extent of both the criticisms and the praise made by Mr. Hoddinott about the Sussex police were adequately reflected both in the summary and in what I have said to the House.

Mr. Alex Carlile: Although Mr. Hoddinott has said that the Sussex police are not to be criticised for failing to find the bomb, does the Home Secretary agree that there remain substantial questions over the part played by Metropolitan police officers? In particular, will he confirm that, some two weeks before the explosion, a purported search was carried out by Metropolitan police officers, which the Sussex police had every reason to believe was thorough?
Will the right hon. and learned Gentleman also confirm that, whereas a search was carried out of the first floor, on which Cabinet Ministers were staying, the officers carrying out that search forgot to search the suite of the right hon. and learned Gentleman himself? Does there not remain a need for a thorough-going inquiry into the level of co-operation by the Metropolitan police and the Sussex police, particularly relating to criminal intelligence?

Mr. Britain: I do not agree with much of what the hon. and learned Gentleman has said. In particular, there is nothing to warrant the criticism of the Metropolitan police. I do not know the basis for making it. As to the search of the first floor premises, I made it clear in my statement that there was a criticism of the fact that those premises were not searched thoroughly and that criticism of the failure to establish responsibility for who should conduct such a search was one of the features of the Hoddinott report. The hon. and learned Gentleman is right to say that, of the three relevant suites, two were searched and the one that was not was mine.

Mr. Andrew Bowden: The deputy chief constable of Hampshire has done a valuable service to the nation. In examining this appalling incident,


a number of lessons have been learnt, and he has the advantage of hindsight. The Sussex police and the chief constable of Sussex have come under some unreasonable criticism since the incident. The House should remember that the morale of that force is bound to be hurt by unfair, unjustified and unsubstantiated criticism.
Will my right hon. Friend say yet again that it is clear that there was no justification for most of the attacks upon the Sussex police, or for the scurrilous attacks on the integrity and professional ability of the chief constable? Will he confirm that nobody could have expected that explosive device to be found unless the hotel had literally been taken apart brick by brick? Will he confirm that nobody who was in Brighton at that time, or who has ever attended a party conference, would think that one could conceivably begin to search the hundreds of people who go in and out of a major conference hotel? From what we have already heard from my right hon. and learned Friend, the report clearly vindicates the efficiency and professional conduct of the Sussex police, and it will be welcomed by the people of Sussex and the nation as a whole.

Mr. Brittan: I am grateful to my hon. Friend, and I endorse what he has said. As I said in my statement, the general conclusion of Mr. Hoddinott was that, against the background that I have described, the Sussex police made proper and reasonable plans and implemented them properly and efficiently. The criticisms of detail have to be seen against that general finding. It is also worth mentioning that, in the group under Sir Lawrence Byford, which will be seeking to reach agreement with the parties about security arrangements for conferences and similar functions, among those who will be assisting Sir Lawrence Byford will be the chief constable of Sussex, Mr. Roger Birch, and Mr. Hoddinott himself.

Mr. Merlyn Rees: Will the Home Secretary accept that the starting point for anything he wants to do, and in which the House will support him, has to be based on the fact that there is a large number of paramilitary groups on both sides of the divide in Northern Ireland who believe in killing, and who will do it again? Will he accept that the fuss, properly made, during the last three months because something happened here gave them nothing but joy, and that they will try again? Anything that we in the House can do to help the Home Secretary, we shall do. He has said that the new committee he will set up will draw information from the Army. I hope that this will be only on its knowledge of bomb disposal. When he goes wider on intelligence, will he make absolutely sure that it is the police who are in charge of all of it, because there is nothing the paramilitaries would like better than that they should drive us in a direction that weakens our democracy and our party conferences, because they do not believe in democracy?

Mr. Brittan: I can unhesitatingly endorse every word that the right hon. Gentleman has said, without qualification. The responsibility of the police is paramount. In regard to the Army and the security service serving as part of the group under Home Office chairmanship, I am referring to particular forms of expertise which can be drawn upon and then conveyed in the form of advice and co-ordination to the police, whose task is precisely what the right hon. Gentleman has said.
If I may say so, not only is it the task of the police operationally to deal with these matters, but the tripartite relationship of the Home Office, the police authority and the chief constable is underlined by what has occurred here, where the report is a report to the chief constable, its wider aspects are being canvassed in the House and its detailed application to Sussex will be a matter to be discussed between the chief constable and his authority, which is meeting tomorrow.

Mr. Eldon Griffiths: Is not one of the clear lessons that the technology of terror is now developing more rapidly than the capability of the security forces to deal with it? In that context may I welcome what I have urged in the House several times—the fact that the very real experience of the Royal Ulster Constabulary is now to be more effectively used on this side of the water? I wish to ask my right hon. and learned Friend specific questions. What is to be the relationship of the TIGER committee, the committee for terrorist information gathering, evaluation and review, with the new working party that he is setting up? Will he give to the House an assurance that this new body will ensure that the collation and dissemination of counter-terrorist intelligence are more effective and that the sharing of the methods of dealing with terrorism will not be impeded by vicious and misleading attacks on the men and women of the special branch and the security service who risk their lives to protect us?

Mr. Brittan: On the last point, I certainly agree with my hon. Friend that the work of people in the special branch and the security service is of crucial importance in this area. It would be an absolute tragedy if what is said in the House or elsewhere were to undermine their morale or their work, which is necessary for the protection of the lives of us all.
In regard to the relationships to which my hon. Friend referred, I think that what he has in mind is the arrangement that I announced last October. The difference essentially between what I have announced today and what I announced last October is that last October we were talking about arrangements of an inter-departmental kind, within Government. Here one is talking about advice and co-ordination of information and techniques for the police service.

Mr. J. D. Concannon: Will the Home Secretary accept that the Opposition have a role to play? Knowing full well the delicacies of the security aspect—this is what my right hon. Friend the Member for Morley and Leeds, South (Mr. Rees) was trying to put over—I should like the Home Secretary to reflect upon his decision not to let my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman)—I say "my right hon. Friend" advisedly—have a full copy of the report, on Privy Councillor terms. I can assure him that on occasion this has been done in regard to other matters. It is a delicate report, but I do not think anyone has ever been let down when information has been made available on Privy Councillor terms.

Mr. Brittan: I am grateful to the right hon. Gentleman. I shall, of course, reflect on what he has said. There was a precedent for handling the matter as we have done. I assure the right hon. Gentleman—I hope the right hon.


Member for Manchester, Gorton (Mr. Kaufman) will accept it as well-that it has not been done in any spirit of ill will or personal doubt.

Mr. Ivor Stanbrook: Does not the report demonstrate the need for greater resources to be made available to the special branch of each police force? Is my right hon. and learned Friend satisfied with the coordination which exists between 43 different special branches?

Mr. Brittan: These matters are perhaps better considered in another context, but to the extent that they arise they will for these purposes be considered under the new arrangements that I have set out.

Mr. Robert Maclennan: While one accepts the need for and appropriateness of establishing a new permanent working group, and the readiness of the Social Democratic party to participate in Sir Lawrence Byford's group, can the Secretary of State ensure, by publishing detailed terms of reference, that a new permanent group will not impinge upon the conduct of national policing policy or move us in any way towards a national police force as a response to this terrorist emergency?

Mr. Brittan: I am grateful to the hon. Gentleman for his indication, as one would expect, of the co-operation of his party with Sir Lawrence Byford's group, which we shall value and which, I am sure, will be of great benefit. I am happy to reinforce what I said in my statement; the new arrangements that I have set in hand are not meant in any way to lean towards the creation of a national police force. If the hon. Gentleman looks at the language, he will see that it has been most carefully chosen to avoid any such implication or trend.

Several Hon. Members: rose—

Mr. Speaker: Order. I have to have regard for the subsequent business. We have a standing order No. 10 application and also a ten-minute Bill, so I shall allow questions on this to go on until 4.30; then we must move on.

Mr. Anthony Nelson: Will my right hon. and learned Friend confirm that the high regard and confidence placed in Mr. Roger Birch, the chief constable of Sussex, are in no way diminished by the contents of the report? Will he confirm that the inclusion of Roger Birch in the group of chief constables is a welcome reflection of this? Will he confirm that the proposed setting up of the group of chief constables in no way reflects a shift in responsibility for the policing of future political conferences from the chief constable of a county to another group?

Mr. Brittan: On the last point, that is certainly the case. The chief constable of Lancashire will have responsibility for the arrangements at Blackpool. I am sure that he will be assisted by the pooling of advice and expertise that the new arrangements will enable to exist and also by the co-operation of political parties in the House in working out arrangements that are desirable for events such as this in a way that would not be done on the basis of any one force area when conferences and other events move from place to place.
In regard to the Sussex police, one of the most striking features of the reaction since October is the absolute unanimity of Members of Parliament from Sussex in expressing their warm and loyal support for the Sussex police force, a support which I know from those who have spoken would not have been readily expressed if it were not a reflection of years of experience of the work of that force.

Mr. Ken Maginnis: Will the Home Secretary recognise that, while one is pleased that police forces in Great Britain will benefit from the hard-earned and dearly bought experience of the Royal Ulster Constabulary, terrorism cannot be combated effectively if there is not whole-hearted support for our police forces?
When the Prevention of Terrorism Act is used to combat terrorism, will the right hon. and learned Gentleman ensure that the public are properly informed, notwithstanding the constraints that may exist at any particular time? Will he ensure that the public are informed of the reason and justification for the Act being invoked?

Mr. Brittan: I understand the hon. Gentleman's concern. It is often difficult to inform the public in specific terms of the exercise of powers that are contained in the Act. I welcome the opportunity once again to give the absolute assurance that I regard the powers as extremely undesirable in principle but sadly necessary in practice and to be exercised only with the greatest possible care by the incumbent of my office. I assure the hon. Gentleman and the country that it is in that sense and spirit that the powers are exercised. They will never be exercised for political purposes, contrary to some of the suggestions which have been bruited in recent months.

Mr. Kenneth Warren: I welcome the words that my right hon. and learned Friend has spoken in praise of the Sussex police force. As a Sussex Member, I know of its efficiency and that of the chief constable. However, is he aware that I am deeply disturbed at the lack of understanding that all of us have, and clearly have had, about the standards of security that are necessary and the failure to search, as was required, during the course of the conference? I hope that the working group will not merely be a group of wise people which will say what should be done. I trust that my right hon. and learned Friend will willingly take on the task of ensuring that that which has to be done is enforced.

Mr. Brittan: I am grateful to my hon. Friend for his support. He will recognise that we are talking about something which is dependent on police ability, efficiency and confidence and on the readiness of individuals, organisations and parties to make the necessary changes, which will always be unwelcome. A balance will continue to have to be struck between the level of security and the ordinary workings of democracy. It is a matter of building up support for what is necessary and striking a proper balance, which may be a new one, and not merely that of the Home Secretary enforcing that which is required for security. It is for that reason that I attach the greatest importance to the co-operation of all the political parties in the Byford group, as well as the work of the new working group, in dealing with the other matters to which I have referred.

Mr. D. N. Campbell-Savours: What will the relationship be between the national reporting centre and the new permanent working group with its responsibility for bringing about
successful co-ordination between police forces throughout Great Britain and also to ensure that they have available to them all relevant techniques and experience?
How will the two organisations relate to each other?

Mr. Brittan: There is no connection between one and the other.

Mr. James Hill: Will my right hon. and learned Friend admit that one of the crucial areas of the police intervention at Brighton was when the occupants of the Grand Hotel were herded together on the promenade, where we were perfectly easy targets for any second intervention by the IRA? My wife and I were in room 301, two floors above the Prime Minister, so we know the trauma of the events. However, we were all herded together on the promenade for some hours. Should the police be informed that sometimes assassination cannot be prevented if many prominent people are herded together in one place at 1 o'clock, 3 o'clock, 4 o'clock or 5 o'clock in the morning?

Mr. Brittan: I take note of my hon. Friend's point and I am grateful to him for raising it.

Mr. Harry Ewing: Could I raise a different aspect that stems from the Home Secretary's statement? Although the statement relates to the Brighton bomb incident, and therefore Sussex, the consequences are important and there are major proposals which go far wider than Sussex.
Does the right hon. and learned Gentleman agree that the police forces that are responsible for major conference centres throughout Britain have an almost impossible task? New conference centres are being developed at Harrogate and Bournemouth, and the four towns of Harrogate, Bournemouth, Blackpool and Brighton are all holiday resorts. Has he considered the danger of the local authorities that are responsible for letting these centres for major party political conferences telling the political parties that their interference with security during the normal holiday trade is now so great and so intrusive that they will no longer take the party conferences? Are we moving towards a situation in which we might well have to bring the conferences to London, where there is security, rather than take them to what are basically holiday towns?

Mr. Brittan: I am grateful to the hon. Gentleman for drawing attention to an important aspect, but I am not sure that I have come to the conclusion that he has. I can assure him that it is the intention of Sir Lawrence Byford in the course of his work to discuss with representatives of the hotel industry, both generally and perhaps in relation to specific occasions, what they can do to assist. The same will apply to those responsible for the management of conference centres and other places that are used for such purposes. It may be that action can be taken across the board in the course of making general arrangements and not in expectation of a particular conference. Whether that is so and what that action could be are matters which Sir Lawrence will wish to consider with representatives of the hotel industry and those who manage conferences.

Mr. David Atkinson: I represent a party conference town and I welcome what my right hon.

and learned Friend has said. May I ask him to take the opportunity to clarify the law of treason as it relates to acts of terrorism, such as that which took place in Brighton, which are designed to eliminate a Government? Will those who are found responsible for the evil act at Brighton be subject to the law of treason? Does the law as it stands still carry the death penalty in those circumstances?

Mr. Brittan: The law of treason carries the death penalty, but it is for prosecuting authorities and not for the Government to decide whether charges should be brought in a particular case and, if so, what charges shoulc be laid. My right hon. and learned Friend the Attorney-General exercises an independent judgment in these matters and it would not be appropriate for me to express a view on what offence has been committed or what charge should be brought in a particular case.

Mr. Tony Benn: Is the Home Secretary aware that all intrusions into civil liberty are begun by arguments on grounds of security, and that any examination of the proposals, which my right hon. Friends have not been able to see in confidence, are bound to raise in the minds of many some doubts about what is in store? The right hon. and learned Gentleman speaks as if the risk of assassination is especially a matter for party conferences—

Mr. Brittan: indicate dissent.

Mr. Benn: Well, the implication was that they bring special security requirements, but any Prime Minister, Minister, Member of Parliament, political leader or anyone else is exposed throughout the country all the time to the risk of attack as he does his job by speaking at public meetings. If the police are now to assume powers as great as those which have been suggested, that could have the effect of separating, on security grounds, those who exercise power or have responsibility from those to whom they are responsible. I hope that the right hon. and learned Gentleman will take these matters seriously. Many ideas have been produced in the abstract that have commanded support in the aftermath of an explosion, as with the Prevention of Terrorism Act, and they are seen afterwards to have very different purposes in their actual application.

Mr. Brittan: I agree with a great deal of what the right hon. Gentleman has said. I hope that I made it clear in my statement that I regard the proper balance between security and the exercise of our civil liberties as a precious one that should not lightly be altered. The report and its consideration relate specifically to conferences and comparable events which are comparable in scale. The right hon. Gentleman is right to say that security issues arise at events of a lesser scale that are attended by those who may be at risk of assassination. I would not disagree with that. But nothing to which I have referred indicates the slightest readiness to slide over civil liberties, which are as precious to those of us on this side of the House as they are to the right hon. Gentleman.

Mr. W. Benyon: If a large part of the United States Administration were staying in the same hotel, the hotel would be cleared exhaustively beforehand, and everybody would be searched throughout. Is this not the sort of price we have to pay if we want the party conference system to continue?

Mr. Brittan: That is exactly the sort of question we have to face up to.

Several Hon. Members: rose—

Mr. Speaker: Very few hon. Members are standing. I will call those who have been standing if they will put their questions very briefly.

Mr. David Winnick: The Provisional IRA is the enemy of both Irish and British democracy, and there is always the utmost condemnation of terrorism from all parts of the House. In view of the answer which the right hon. and learned Gentleman gave to the hon. Member for Bury St. Edmunds (Mr. Griffiths), is the Home Secretary suggesting that parliamentary concern about the special branch when the special branch is not involving itself with terrorism or any other offence is wrong? Would the right hon. and learned Gentleman not take this opportunity to state clearly that we should have a healthy interest in the activities of the special branch and that the present inquiry being conducted by the Select Committee is perfectly all right and justified?

Mr. Brittan: As to the inquiry by the Select Committee, I was not saying that it was all right or was not all right. It is a matter for the Select Committee and not a matter for me. I was merely saying that I thought that unfounded criticisms of the special branch were damaging to morale and were unjustified.

Mr. Robert Adley: The hon. Member for Falkirk, East (Mr. Ewing) mentioned four towns, one in Lancashire, one in Yorkshire, one in Sussex and one in Dorset. Will my right hon. and learned Friend take note that Dorset is a small county, with seven Members of Parliament, and that therefore the percentage burden of the 1986 Conservative party conference falling upon the Dorset constabulary is probably out of all proportion to that faced by any other county constabulary hitherto? Will he in very good time ensure that adequate funds are made available not just from my constituents but from central funds to enable the job to be done properly?

Mr. Brittan: I take note of what my hon. Friend has said, but I would not like to arouse any financial expectations.

Mr. Dennis Skinner: Will the Home Secretary tell the House how many police man hours of the Sussex constabulary, including the special branch, were used in the miners' strike in the weeks and months leading up to the incident at Brighton?
Will he also tell the working group that he is setting up that it is nothing short of hypocrisy for the Government to be talking about trying to get the matters that went wrong in October put right if at the same time the Government of which he is a member are prepared to continue the miners' dispute, will not agree to a settlement and therefore will use more and more police man hours in order to carry that through?

Mr. Brittan: I do not have information as to the number of man hours that the Sussex police force used in the miners' strike.
With regard to the other matters, I think it is extremely unlikely that I would wish to communicate that information to the working group.

Mr. Richard Alexander: May I express the hope that the informality and free mixing which characterises all party conferences will not be jeopardised as a result of the outcome of the findings of my right hon.

and learned Friend and his colleagues and that under the Prevention of Terrorism Act bodily searches will not be a necessary feature for people who have to enter and leave the party conference?

Mr. Brittan: I appreciate my hon. Friend's views, but it is exactly the contrast between the desire to be spared that kind of experience on the one hand and the desire to ensure adequate security on the other to which my hon. Friend the Member for Milton Keynes (Mr. Benyon) gave vent. It is that balance that needs to be worked out, and plainly there is a lot to be done in doing so.

Mr. Richard Tracey: Further to the points raised by the hon. Member for Falkirk, East (Mr. Ewing) and my hon. Friend the Member for Milton Keynes (Mr. Benyon), does the report comment on the implications of modern day terrorist methods that make it practically impossible to guarantee the security of prominent people staying together in one place when the location of that place is known so far in advance?

Mr. Brittan: My hon. Friend is certainly right to point out the difficulties, and it is the details of terrorist matters of the kind to which my hon. Friend has alluded that make it inappropriate to publish the report.

Mr. David Maclean: Will my right hon. and learned Friend be assured by me, as someone who spent all his life in security before entering the House, that I believe that the Hoddinott report is absolutely correct both in its conclusions and in its analysis, in that the level of policing given at the time was adequate in relation to the perceived threat and to the expectations of conference goers? Further, will he disregard the comments of the right hon. Member for Manchester, Gorton (Mr. Kaufman) that the report is inadequate and complacent, because I believe that the right hon. Gentleman is utterly off beam? Finally, would my right hon. and learned Friend ensure that adequate resources are given to the training of police officers, particularly in the provincial forces, to deal with the new terrorist threat that we face because of high technology in terrorist equipment?

Mr. Brittan: I am grateful to my hon. Friend for his assurance. I can certainly assure him that the training point will be taken on board.

Mr. Peter Bruinvels: In welcoming the report, which seems most helpful, may I ask my right hon. and learned Friend to take note that we on this side certainly welcome the news that the party conferences will continue to take place? However, my concern remains that we should have the priority of searching not only the premises before the conference delegates attend but also the people each time that they go into the conference hotels. That should be the main concern, and the location of the hotel which is publicised. I wonder whether the report has examined the risk possibility of locating all senior Ministers or Opposition spokesmen in the same hotel, because this seems to lead us into a difficult situation on which the Northern Ireland police force obviously will be able to advise.

Mr. Brittan: Some of these questions are among the matters that have to be considered by the Byford group and on which the parties themselves will ultimately take a view.

Coal Industry Dispute

Mr. Kevin Barron: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 10, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
the breakdown of talks between the National Coal Board and the National Union of Mineworkers yesterday and the involvement of Her Majesty's Government in the breakdown.
I do so for three reasons. First, it has become public knowledge in the past week that the National Union of Mineworkers has widened its negotiating team with regard to seeking a settlement and has been in a position to say that it is prepared to meet for talks without any preconditions as to what will take place at those talks.
Secondly, it is obvious to any observer in the past two months that there are also people in the National Coal Board—and it is a very different National Coal Board from 12 months ago—who are seeking talks to resolve the present mining dispute.
Thirdly, it has become apparent to everybody in the country in the last 24 hours from the briefings that have gone on in the press room at Downing street—although the Prime Minister has tried to deny those briefings in the Chamber this afternoon—that, indeed, the Prime Minister does not want these meetings to take place. It is no coincidence that most of today's national newspapers carry the same front page story—that Margaret Thatcher is stopping the negotiations that are going on to try to settle the mining dispute. [HON. MEMBERS: "So what?"] Conservative Members say, "So what?" When the dispute is over and work starts again, one person less will be working in my constituency—the person who was found dead on Saturday afternoon after being bullied while coal picking on a coal waste tip in my constituency. If Conservative Members want to discuss what is happening in the coal dispute, I suggest that they, too, should make an application under Standing Order No. 10. They can then get on their feet and debate the cost of the strike and how it is affecting the country at present.
It is a question not just of the economic effect of between £90 million and £100 million per week being used in a crude attempt to defeat the NUM, but of the hardship suffered by communities in my constituency and many others who have been fighting for the past 10 months not out of self-interest, but for their dignity and right to work. [Interruption.] It is a great pity that Conservative Members who constantly interrupt make no attempt to listen to what has been said in the Yorkshire coalfield and in many other coalfields in the past 10 months.

Mr. Eric S. Heffer: On a point of order, Mr. Speaker. Could you ask the well-heeled rabble on the Conservative Benches to remain silent while my hon. Friend the Member for Rother Valley (Mr. Barron) is speaking? [Interruption.]

Mr. Speaker: Order. There was a certain amount of interruption earlier, but not at this particular moment. I am listening very carefully anyway. [Interruption.] Order.

Mr. Barron: If Conservative Members feel so strongly about the coal dispute, they, too, should apply for time to debate it.
In constituencies such as mine, where thousands of people—the vast majority—are still on strike, after 11

months in some areas, the suffering involved justifies debate. As an individual Member of Parliament, I feel very strongly about the denial of Government time to debate an issue affecting so many of my constituents.
I therefore ask you, Mr. Speaker, to grant the debate for which I have asked in place of the business set clown for today because I and many others feel very strongly that the Government should answer for what is now openly going on in relation to the dispute between the National Coal Board and the National Union of Mineworkers.

Mr. Speaker: The hon. Member asks leave to move the Adjournment of the House for the purpose of discussing an urgent and important matter, namely,
the breakdown of talks between the National Coal Board and the National Union of Mineworkers yesterday and the involvement of Her Majesty's Government in the breakdown.
I must say to the hon. Gentleman that I am in no doubt that at an appropriate moment, and when it will be helpful to the settlement of the dispute, we should have a debate on this matter; but, as he knows, my only duty in considering applications under Standing Order No. 10 is to decide whether the matter should be given priority over the business set down for this evening or tomorrow. I regret that I do not find that the matter that he has raised meets all the criteria laid down in that Standing Order, and I cannot, therefore, submit his application to the House.

Mr. Dennis Skinner: On a point of order, Mr. Speaker.

Mr. Tony Benn: On a point of order. Mr. Speaker.

Mr. Speaker: I shall take Mr. Benn's point of order first.

Mr. Benn: I am not challenging what you, Mr. Speaker, have said in respect of the application made by my hon. Friend the Member for Rother Valley (Mr. Barron), but I rise to ask for your help in two respects.
Following the earlier dicussion on these points, I consulted the Library about the practice of previous Speakers in industrial disputes. I have today obtained the following information, which is, of course, available to any Member.
During the period that became known as the winter of discontent, there were debates under Standing Order No. 9—now Standing Order No. 10—on 22 January and 5 February 1979. In addition, there were private notice questions on 25 and 31 January and 1 February 1979. In other words, there were two emergency debates and three private notice questions within a period of two weeks. The Labour party was in government at that time, and the then Speaker allowed the Opposition to bring those matters urgently to the attention of the House under those procedures. I have not referred to any other type of debate.
My second point, Mr. Speaker, stems from your ruling today that it is not proper for a Member of Parliament to refer in the House or on the radio to the fact that a private notice question has been tabled. As you well know, I tried for one on Monday in relation to the rail strike. You, Mr. Speaker, did not allow it, so I did not raise it, and I appreciate that one cannot question your ruling on a private notice question. I had, however, told a mass of people that I intended to try to get a question on tie rail strike. When they asked where the question was, I replied, "Mr. Speaker disallowed it." I ask you to consider this


very important point, Mr. Speaker. Are you seriously saying that Members of Parliament who try to use that mechanism of the House and fail are not allowed to tell anyone that they even tried?
Two further considerations arise. [HON. MEMBERS: "Oh, no."] These are very important matters which may affect any Member at any time. In the absence of debate in the House of Commons you, Mr. Speaker, know what happens. Tomorrow the House of Lords, which is not elected, will be discussing matters, including the miners' strike, on television. In the absence of parliamentary debate, Mr. Bernard Ingham tells Lobby correspondents every morning what the Prime Minister wants them to know. The reports are then published anonymously, and the Lobby correspondents do not even admit that they go to No. 10.
I submit most respectfully, Mr. Speaker, that there is at this moment and on this issue a question concerning the defence of the rights of constituents—we merely represent other people—and our ability to bring urgently to the notice of Parliament the real hardship being suffered by good people, which is not allowed to be discussed on the Floor of the House.

Mr. Speaker: On private notice questions, there is a long-standing convention that applications which are disallowed are not mentioned in the House. That would equally go for not mentioning them on the radio.
With regard to the granting of debates under Standing Order No. 10, the right hon. Gentleman should read the Standing Order carefully as I am limited by what is set down in it. The right hon. Gentleman is surely not suggesting that I should be wholly responsible for what is debated in the House. That is the implication of his question. There exist the usual channels through which debates and the time of the House are discussed. That is a matter for people other than myself. I am responsible for ensuring fairness in the calling of Members who rise to ask questions and the protection of Back Benchers. I do not deny that the right hon. Gentleman has a right to put the interests of his constituents, but that is exactly what we did at Prime Minister's Questions today.

Several Hon. Members: rose—

Mr. Benn: Further to that specific point, Mr. Speaker. Would you please clarify the situation for Members in my position? I put down a private notice question and I told people that I intended to do so. When they asked why it had not appeared, I told them that it had been disallowed. I mentioned that fact on the radio when I was asked why I did not use the normal mechanisms of the House. That is a specific question which arises from Monday. Are you, Mr. Speaker, now saying—it is important that this is made clear—that I am in breach of your ruling if I tell anyone that I intend to table a private notice question or that the intended question has been disallowed? That is distinct from not questioning the matter on the Floor of the House. No one is arguing about that because we all know the position in that respect. If it is now to be a breach of your ruling to tell anyone what one is trying to do and why it has not worked, that is a substantial expansion.

Mr. Speaker: It has always been so. [Interruption.] I am merely following what has happened in the past.
With regard to private notice questions, I am bound to take into account other opportunities that the right hon. Member for Chesterfield (Mr. Benn) or any other Member may have to raise matters in the House.

Mr. Skinner: On a point of order, Mr. Speaker. When you gave your ruling on the Standing Order No. 10 application made by my hon. Friend the Member for Rother Valley (Mr. Barron), you used what could loosely be termed code language in saying that you would not accept the application this time and referring to an "appropriate" time. Between you and me, Mr. Speaker, I should like to wheedle a more simplistic answer from you as to what you really mean. Are you saying that if we persist in this matter we may eventually make it, or that if an Opposition Front Bench spokesman made the application it might be granted? We need to know because we want to fire a few more shots from the locker. If it is possible that we may obtain the debate through these other methods, so be it. We shall not make a fuss about that. Could you, Mr. Speaker, tell us precisely what you meant when you talked about an "appropriate" time? We should like to know.

Mr. Speaker: The hon. Member should not read too much into codes. I have followed strictly what is said in Standing Order No. 10, which states:
In determining whether a matter is urgent Mr. Speaker shall have regard to the probability of the matter being brought before the House in time by other means.
In my preamble, I said that I hoped that at the appropriate time there would be a debate on this matter. The Speaker would be put in an intolerable position if he had to decide every day what should be discussed. That is a matter for the usual channels.

Mr. Jeremy Corbyn: Further to the point of order, Mr. Speaker. Without wishing to challenge what you said earlier, I ask you to consider the number of hon. Members who, during the past 10 months, have made Standing Order No. 10 applications to debate the miners' dispute because of the grave disquiet outside the House.
I believe that you, Mr. Speaker, should consider an important point of democracy. If the Front Benchers do not wish to debate this critical matter but the Back Benchers do, it is important that you, Mr. Speaker, should protect the rights of those Back Benchers by agreeing to a debate, so that the issues of the appalling hardship in the coalfields, the waste of public money and the deterioration of civil liberties because of the Government's actions during the dispute are aired in this place. That would enable a full, open and free debate to take place and we would not have these coded attempts to suffocate debate in the media and in the House of Commons.

Mr. Speaker: I think the hon. Member's memory is at fault, because some time ago I granted a Standing Order No. 10 debate on this very subject. I hope, therefore, that the hon. Member is not accusing me of not taking these matters too seriously. I believe that this is a serious matter, which should be debated at the appropriate moment. I think that the whole House would wish to debate this matter at a moment when such a debate would be helpful rather than unhelpful.

STATUTORY INSTRUMENTS, &c.

Ordered,
That the draft Public Lending Right (Increase of Limit) Order 1985 be referred to a Standing Committee on Statutory Instruments, &amp;c.—[Mr. Archie Hamilton.]

Official Secrets Act (Amendment)

Mr. Chris Smith: I beg to move,
That leave be given to bring in a Bill to repeal section 2 of the Official Secrets Act 1911; and for connected purposes.
For many years, there have been strong arid telling criticisms of section 2 of the Official Secrets Act 1911. Lord Scarman, in his recent Guildhall lecture, said that it should go. Twelve years ago, the Franks committee described it as "a mess". Shortly before that, Mr. Justice Caulfield, in his summing-up at the conclusion of the Sunday Telegraph case, remarked to the jury that they might well feel it was time for the Act to be "pensioned off". Only a few years ago, the Home Secretary told the House that the section was "simply indefensible". They were absolutely right in condemning section 2 of the Act then, and they would still be right now.
I am impelled to place this issue before the House today because one of my constituents faces prosecution next week under section 2. Following earlier discussions this afternoon, I cannot, of course, comment directly on the Clive Ponting case because of the sub judice rules of the House. It is sad that we are prevented by those rules from questioning further the issue of the case and the way in which it is to be handled. However, I must accept your ruling, Mr. Speaker.
I must make a number of extremely important general points. We should remember the circumstances in which the 1911 Act reached the statute book. It passed through all its stages in the House of Commons, including Committee, in about 45 minutes. It was presented to the House as a minor amendment to legislation. The Attorney-General of the day said:
There is nothing novel in the principle of the Bill".—[Official Report, 18 August 1911; Vol. 29, c. 2252.]
The Under-Secretary of State for War told the House that the actual change in the law was "slight". They were wrong. Section 2 embodied a major change in the law which fundamentally affected, and still affects. the liberties of those citizens who work in the Civil Service and the ability of all of us to know what they are doing. The rushed manner in which the Bill became law reflected no credit on any of those who allowed it to happen, although I am pleased to note that the 10 hon. Members who voted against the measure on Report in 1911 included Keir Hardie and his Labour colleagues.
Section 2 was not mentioned at any stage during the Bill's passage. It is a catch-all section, covering potentially any piece of paper that ever crosses a civil servant's desk, any discussion held or action taken and any establishment owned or run by the Government. It is clearly absurd to have such a broad sweep of prohibition against contact with the public, with criminal prosecution and potential imprisonment facing civil servants where ordinary disciplinary procedures under codes of employment would be appropriate, if any action at all were needed.
I am not arguing that national security should not be protected in law. It should, and the provisions of section 1 of the Act—which purports to deal with spying—should be tightened up to ensure that that is achieved. Section 2 is not needed for the protection of genuine


national security matters. It can, in fact, be used by Governments of any political persuasion for purposes that may well run counter to the national interest.
The danger that is inherent in section 2 is not so much that its use—which is subject to the Attorney-General's decision—might be over completely trivial matters, although it remains an absurdity to have a law that does cover so much trivia. The danger is that Governments—again, this applies to all Governments, of whatever party—may use this section of the Act for political purposes that have no connection with the protection of national security. For example, they may wish to avoid embarrassment over the actions of particular Ministers. They may wish to clamp down on leaks that are politically but not nationally damaging. They may wish to obtain warrants for the search of pressure group premises. This section of the Act permits them to do so, and it should not.
It is worth noting in this connection that there has been a worrying resurgence in recent months in the use or threatened use of section 2 of the Act. Sarah Tisdall has not been alone in feeling its brunt. From 1916 to 1982 there had been only 38 prosecutions under the section. Parliament should be concerned when such a discredited piece of law is wheeled out so vigorously again.
Finally, and perhaps most importantly, repeal of section 2 is a prerequisite for the necessary task of opening up the processes of government to wider public scrutiny and knowledge. There is far too much secrecy in government in this country. Before freedom of information can ever become a reality, this particular piece of legislation must go.
We are a democracy. It is surely right that the public—the voters—who supposedly hold the ultimate power over all of us should know to the fullest possible extent what is going on in government on their behalf—the facts, the options being considered, the decisions taken.
It is with that aim in mind that I urge the House to take this first but necessary step along the road to greater openness in government, greater access to knowledge for the citizen and greater liberty for us all.

Question put and agreed to.

Bill ordered to be brought in by Mr. Chris Smith, Mr. Jonathan Aitken, Mr. Andrew F. Bennett, Mr. Alex Carlile, Mr. Tam Dalyell, Mr. Alf Dubs, Mr. Michael Foot, Ms Harriet Harman, Mr. Robert Maclennan, Mr. Matthew Parris, Mr. Merlyn Rees and Ms Jo Richardson.

OFFICIAL SECRETS ACT (AMENDMENT)

Mr. Chris Smith accordingly presented a Bill to repeal section 2 of the Official Secrets Act 1911; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 26 April and to be printed. [Bill 61.]

SUPPLEMENTARY ESTIMATES

Class II, Vote 10

European Communities Budget

[Relevant document: Treasury and Civil Service Committee Third Report, House of Commons Paper 158, Session 1984–85.]

5 pm

The Economic Secretary to the Treasury (Mr. Ian Stewart): I beg to move,
That a supplementary sum, not exceeding £119,218,000, be granted to Her Majesty out of the Consolidated Fund to defray the charges which will come in course of payment during the year ending on 31st March 1985 for expenditure by the Treasury in connection with payments to the Budget of the European Communities not covered by direct charges on the Consolidated Fund under section 2(3) of the European Communities Act 1972, as set out in House of Commons Paper No. 145.
The Supplementary Estimate before the House today relates to a payment of £119 million in respect of the supplementary budget for the European Community for 1984. This finance was arranged through an intergovernmental agreement between the member states of the Community last October because supplementary finance could not be provided last year as the Community had reached the ceiling under the VAT 1 per cent. own resources limit. The payment for the United Kingdom is 201 million ecus—the sterling equivalent is £119 million—in the form of an advance on own resources to the EEC and payable in eight half-yearly instalments from June 1986.
Some interest has been expressed in the form in which this payment is being brought before the House for consideration and approval. Last year, the Government introduced an order under section 1 of the European Communities Act 1972 to designate the intergovernmental agreement as a treaty ancillary to the European treaty. That subject was of some interest to various Select Committees of the House and an application was made to the courts about the order. The decision of the High Court and the Court of Appeal vindicated comprehensively the Government's contention that this was a lawful and appropriate means of dealing with the matter.
The proposal now before the House under the Supplementary Estimate procedure is in respect of payment following the intergovernmental agreement of 1985. In the context of the agreement, there is reference to a payment to the Community in 1984 and for the avoidance of doubt the Government decided that it would be appropriate to use the Supplementary Estimate procedure now that we are in 1985.

Mr. Eric Forth: Can my hon. Friend confirm that this procedure will not be repeated under the auspices of the so-called new budget discipline measures that we might expect in the future and that this will be absolutely the last time that any such measure will come before the House?

Mr. Stewart: I should like to think that supplementary budgets for the European Community would not be a thing of the future, but that would be too optimistic. I shall have more to say about that later.

Dr. Oonagh McDonald: Does that mean that the Minister has no faith in the budgetary discipline which the Prime Minister achieved and which she has been proclaiming so loudly as the real budgetary discipline that she set out to achieve? Are not the Minister's comments an implicit criticism of the Prime Minister's achievement?

Mr. Stewart: No, my remarks were certainly not that. They were a recognition of the realities of agriculture expenditure, which cannot be precisely predicted at the beginning of any one year. Any hon. Member who suggests that it is possible to predict exactly what agricultural production totals will be, what the weather will be in each of the 10 member states at the beginning of the year, and who claims that there will never be any circumstances that would require the Community to have a supplementary budget is not living in a realistic world.

Mr. Tony Marlow: I rise on a slightly different point, which is also very important. Will my hon. Friend tell the House whether it is outside the competence of Her Majesty's Government to prevent further supplementary budgets?

Mr. Stewart: If the Government agree to a supplementary budget for which finance is available under the normal procedures of the Community, we would expect that to be brought forward. If special finance is required, as it was in 1984, and because normal procedures for that are not available, it requires the agreement of the Government. I shall deal with the points about budget discipline later.
The need for the supplementary finance derives from the fact that there has been an overrun of expenditure in 1984. It would have caused considerable disruption of markets if it had not been possible to finance the unavoidable expenditure in 1984 through agricultural and other policies.

Mr. Neil Hamilton: As my hon. Friend is doubtless aware, article 199 of the treaty states that all items of revenue and expenditure of the Community should be included in the Estimates drawn up at one point in the year. It further provides that the revenues and expenditure shown in the budget should be in balance. As the treaty can be amended only in accordance with article 236—a procedure that, in this instance, we have resolved not to adopt—can my hon. Friend tell me whether, if we agree to what the Government are proposing, we would be conniving in an illegality? Why is it that an illegal budget for Liverpool city council is something that we should revile but, for the European Community, is something that we should endorse?

Mr. Stewart: After my hon. Friend's legal tour de force of the Community's business, I can tell him that the funds about which we are deliberating today are to be provided by agreement between the individual member states and not through the Community's own mechanisms. That is an important difference.

Mr. Nicholas Budgen: rose—

Mr. Stewart: I shall not give way. It would be much better if I tried to explain some of the points rather than allow hon. Members to object to them in advance.

Mrs. Elaine Kellett-Bowman: rose—

Mr. Stewart: I give way to my hon. Friend.

Hon. Members: Sexist.

Mrs. Kellett-Bowman: Before my hon. Friend was interrupted by a number of hon. Members, he said that the measure was to deal with agriculture and other policies. Will he confirm that if the measure is not passed today there could be a considerable hold-up in the payments of regional and social fund to this country?

Mr. Stewart: I can confirm that. The level of cash balances of the Community for 1984 is now very low. If the payments are not made in the very near future, the United Kingdom recipients under the fund would not receive their money.

Mr. Budgen: My hon. Friend used the expression "unavoidable expenditure". If the Agriculture Ministers had set the price structure at a lower level, all the expenditure would have been avoidable.

Mr. Stewart: As is so often the case. I warmly agree with my hon. Friend. Had the correct decision about pricing been taken in 1983 and 1984, I have no doubt that it would have been possible to avoid the overrun.
The figure in the intergovernmental agreement is very much below that which was originally set by the Commission of 2,300 million ecus. We had that reduced to 2,000 million ecus by June, in the July Budget Council it was reduced to 1,350 million ecus and at the September Budget Council meeting to 1,003 million ecus. I believe that that is the absolute practical minimum with which the Community could discharge the commitments flowing from its policy in respect of the 1984 Budget.
During the negotiations in the Budget Council, not only was I seeking to get the lowest possible figure for the supplementary finance; I wanted to ensure three other important United Kingdom objectives. First, I wanted to make it clear that we would not consider making payments until refunds for 1983 had been received by this country. Secondly, I made it clear that measures necessary to guarantee the principles of budgetary discipline should be adopted by the Community and, thirdly, that supplementary finance should be decided by the Parliament of the United Kingdom and not by the Community or the European Parliament.
In the context of the intergovernmental agreement, specific reference was made to the refunds for 1983. At the time that this was drawn up they had not been released. However, they were released soon afterwards, in October. They bring the total of refunds that this Government have negotiated to over £2,500 million since 1980, compared with the figure of zero that was negotiated under the financial mechanism adopted by the Opposition.
I was also able to obtain a commitment from the Ministers of other countries in the Budget Council that, whatever decisions were taken about the mechanism for dealing with the Community's financial decisions in 1985, they would commit themselves to implementing in 1985 the Fontainebleau agreement on the 1,000 million ecu abatement for 1984 to the United Kingdom. If the Fontainebleau proposals are approved by the national parliaments, we in this country will qualify for an automatic abatement of our future contributions. Therefore, instead of having to negotiate with great difficulty and with much acrimony and dispute about obtaining refunds from our net contributions in the future, we should be entitled to deduct automatically a part that


represented two thirds of the equivalent of our VAT share in the previous year. That seems to me to be a major advantage of the new proposals.
The next point that I wanted to be included in the intergovernmental agreement was budget discipline. We insisted that we should not bring this matter before the House of Commons until budget discipline had been agreed by the Community. That was finally ratified in December by the European Council at Dublin. It sets a guideline for agriculture expenditure that is due to grow at a rate below the increase in the own resources base. Some of my hon. Friends have suggested that this can be very easily overturned by qualified majorities. The position is that the Commission's price proposals could be overturned only if there were unanimity in the Council. Since the Commission has given an undertaking that it will submit its proposals in line with the need to keep to the agricultural guidelines, unanimity would be required to go beyond that.
To elaborate upon what I said about future supplementary budgets—

Mr. Anthony Beaumont-Dark: These are very fine, pious words and the EEC only runs on pious words, but if there is to be no mandatory sanction and if this will have to depend upon good will, which has not existed so far, and upon the good will of people who have broken their word to this country after we have paid up time after time, why should we now be satisfied that the past will not go forward into the future, as seems so obvious to all of us?

Mr. Stewart: The conclusions of the Council are binding upon it and they are embodied in the budgetary procedure of the Community. The overall reference framework for the agriculture guidelines has been agreed by all member states and it has been ratified by the European Council. It was one of the major items left over from the Fontainebleau agreement.

Mr. Forth: rose—

Mr. Stewart: May I finish my reply in response to the previous intervention? I shall then give way to my hon. Friend. The idea of budget discipline was first initiated two or three years ago by this country. During that time we have been able to persuade fellow member states that the problem is more serious than they had recognised, that special measures needed to be taken to deal with it and that specific measures of this kind ought to be taken. It was a major achievement by this country. As I said to the Select Committee, budgetary discipline is not just a British "wheeze". It has now been accepted by all member states as being essential if the finances of the Community are to be orderly in the future.

Mr. Forth: My hon. Friend has mentioned the reference framework. Would he confirm that the budget discipline document contains a provision whereby the framework can be altered by a majority vote? Does not this undermine the validity of the framework upon which my hon. Friend lays great stress? Could my hon. Friend also tell me what would happen under the terms of the budget discipline document if there were to be, for example, three consecutive years of exceptional harvest whereby the clawback which is supposed to be allowed for in the budget discipline document could not occur?

Mr. Stewart: As for overspend, I have no doubt that the Commission would have to take increasingly stringent action on price-fixing year after year. That would be the inevitable consequence of the proposals my hon. Friend has mentioned. On the reference framework, it is the component parts of the expenditure that matter. The non-obligatory expenditure is controlled by the maximum rate. That is a fixed formula. The obligatory expenditure under the agriculture policy would be limited by the guideline. Not to have the normal means of adjusting the reference framework if there were changes in the two component parts would be impracticable. However, the component parts are controlled. Control over the agriculture guideline would permit both this year and next year increases of about 5 or 6 per cent. per annum. That has to be compared with an increase in agriculture expenditure of the order of 20 per cent. or more in the last two years. This will represent a very tight constraint, particularly given the fact that already there are very high intervention stocks in the Community which will need to be financed in the coming years.

Mr. Teddy Taylor: How can the Minister possiby talk about restraint when he knows that under the agreement the Commission will be fixing prices on the basis of actual spending in 1984 and 1985, which were years of enormous surplus, and that it will then add something on top? How does the Minister expect me to go back to Southend and tell the prudent council there that if, through unfortunate or aberrant circumstances, it exceeds its spending it will be controlled and eventually ratecapped, but that, despite the normally excessive spending of the EEC, it will apparently be allowed to exceed its spending by means of a Supplementary Estimate?

Mr. Stewart: What I hope my hon. Friend will tell the burgers of Southend, although I am not entirely confident that he will do so, is that it is impossible to determine in advance any form of agricultural support. If there were a national form of deficiency payments, there would be an element of variability according to the outcome during the year in question. It seems to me that the farmers who live around Southend would be able to explain this matter to my hon. Friend, even if his constituents do not understand it. It is because I, the Government and my hon. Friend are concerned that Community expenditure in the past has been so much out of control that we have been very anxious to put in place a system that will apply control to Community expenditure in the future.

Mr. Marlow: As my hon. Friend said so rightly, this matter can be controlled if prices are controlled. My hon. Friend said that the Commission has undertaken to come forward with low increases in farm prices. What will be the position if the Council does not agree with the Commission? Has the Commission given an undertaking that it will not raise those prices?

Mr. Stewart: The Council would have to be unanimous in overturning the Commission's proposals. An important part of the budget discipline arrangements is that Finance Ministers as well as Agriculture Ministers will be involved in any dispute involving decisions of that kind. That will be an important factor in obtaining an improved procedure.
Finally, I said that I thought it was right that this matter should come to Westminster for a decision rather than that


it should be decided in Brussels and Strasbourg. The Commission originally proposed that this money should be made available by means of a loan under article 235. That would have involved scrutiny by the European Parliament but no scrutiny by the United Kingdom Parliament. It seemed to the Government that this was not a proper procedure. Therefore, we insisted, and I was able to have this included in the text of the undertaking, that the United Kingdom and certain other member states would require the parliamentary approval of their own Parliaments before such a payment could be made.
This is an agreement of member states; it is not an instruction from the Commission or the Community. We have undertaken to provide finance, provided that Parliament approves it today, because we believe that it is necessary. The difficulty has arisen because of lack of budget discipline in the past. Significant progress has been made in reforming the financial arrangements of the Community during the past year. To deny payment of our contribution today, apart from amounting to a rejection of an undertaking made with other European countries, would only add to the problems of the Community at a time when it has at last been committed to the major financial improvements that Britain has been seeking. The Government's aim is not to disrupt the Community's finances but to reform them. The agreement is part of that process. Accordingly, I hope that the House will give its approval today.

Dr. Oonagh McDonald: In his opening remarks the Economic Secretary explained the reason for the Government now requesting Parliament's approval for the payment of £119 million into the Community's fund for the shortfall in the 1984 budget under the Supplementary Estimates procedure. He did not explain why the Government originally considered laying an order under the European Communities Act 1972 and then changed their mind, in spite of having been successful in the courts and having their views upheld at least as far as the Court of Appeal, and switched back to the Supplementary Estimates procedure. It would be useful if the Minister would explain why that change was made.
One reason that was mentioned to the Treasury and Civil Service Select Committee, the evidence and report of which we were grateful to have in time for the debate—

Mr. Neil Hamilton: Otherwise the hon. Lady would not have known what to say.

Dr. McDonald: There is plenty of other material.

Mr. Ian Stewart: The hon. Lady mentioned the Treasury and Civil Service Select Committee. I was about to pay my own compliments to the Chairman and members of that Committee for the speed and efficiency with which they have produced their report when one of my hon. Friends sought to intervene and I regret that I omitted to do so. In that report the hon. Lady will find that I gave extensive evidence about the procedural matters that she has raised.

Dr. McDonald: We are not at all surprised that that Freudian slip by the Minister occurred in respect of the Treasury and Civil Service Select Committee's report. I do not think that the reason why the first procedure was chosen and then the change made was dealt with, except

with reference to the question of speed, when the Minister rightly pointed out that most of the other member countries had paid the additional contribution. Indeed, all of them have paid, except for Belgium and Luxembourg, which are due to pay this week, and, if Parliament agrees tonight, the British contribution will be paid.
What will be left out is the Italian contribution, which is the second largest. It would be interesting to know what has happened to that. We should bear in mind recent press reports about what is happening to Community money.

Mr. Budgen: What about the poor official from the Court of Auditors who had his legs broken?

Dr. McDonald: I was particularly sorry to notice that it was an Irishman to whom that happened.
In reply to one of his hon. Friends, the Minister referred to the payments which would be made out of this amount under the social, industry, energy, and, not surprisingly, agriculture funds. The extra amount for the social fund is tiny. Under the heading of "Industry and Energy", £32 million additional money is going to the Community. A proportion of that £32 million will be spent on administration, technical operating expenditure and certain contractual obligations. However, the Minister has failed to tell us how much out of that additional £32 million payment to various members of the Community will come to Britain. Do we benefit at all under the heading of "Industry and Energy" payments from the £119 million, plus the contributions from other members of the Community?
The largest part of the supplementary budget will, not surprisingly, go on agriculture. Certain questions were raised in the Treasury and Civil Service Select Committee's report about the reimbursable advance, and it did not receive a clear reply. The difference between that and a loan was not made clear, but the most important point relates to the repayments that are due to commence in June 1986.
What guarantee do we have that those repayments will be made so far ahead? The Minister gave us no guarantee at all that we would get back, possibly in June 1986 onwards, some of that reimbursable advance. We shall get some of that money back. Yet, even in June 1986 and the years thereafter, we shall be giving more money to the Community that we get back from our reimbursable advance. The Minister gave us no reason for optimism on budgetary discipline that the Community would not ask for another reimbursable advance in the years to come. We have had no assurances that that reimbursable advance will be repaid in future.
The main reason for the overrun is, once again, agricultural spending. The Minister has already admitted that in the evidence that he gave. He said that the bulk of the overrun was the result of changes in the markets, the volume of production and the price at which it can be sold. Much of it related to livestock, and a smaller proportion related to Mediterranean products. That was the main reason for the EC's overspend in 1984.
When one begins to look at other sources, one finds additional reasons. For example, the Eurostat statistics for the first and second quarters of 1984 show that producer prices continued to rise at a faster rate than farm costs. Those are the latest available statistics. Therefore, prices were ahead of farm costs by more than 3 per cent. That means an average increase of almost 4 per cent. in real


incomes for the farming sector of the Community. That happened despite the smaller than traditional price increases in 1984, the limitations on dairy production and the not necessarily favourable outturn for part of the livestock and crop sectors.
The favourable cereal harvest helped to boost average farm incomes. That meant that agriculture was one of the few major sectors of industry in the Community to show an increase in income, when reduced output, incomes and redundancy hit almost every other major industry. We know that the money has gone where it usually goes—to boost farm prices and farm incomes.

Mr. Phillip Oppenheim: rose—

Dr. McDonald: I shall not give way. We have a limited time for the debate.

Mr. Teddy Taylor: On a point of order, Mr. Deputy Speaker. Will you advise the House whether the debate is limited?

Mr. Deputy Speaker (Sir Paul Dean): The debate can continue until 10 o'clock. I am not saying that it will, but it can.

Dr. McDonald: Nevertheless, I wish to continue with my remarks. The money has gone to maintain farm incomes at a better level than those in other areas of industry.
Other reasons for the cost overrun were successfully tabulated in the Court of Auditors' report for 1983. There is no reason to suppose that what occurred in 1983 did not recur in 1984 and will not recur in future. First, the cost of storage of surplus farm produce continues to be an extremely expensive item in the Community's budget, yet it is not properly itemised or budgeted for in any of the Community's accounts. Secondly, the cost of storage will continue to rise in 1984, and there is no reason to suppose that it will come under control.
The Court of Auditors' report for 1983 estimated that £7 billion disappeared from the accounts of the Common Market. These nitty-gritty questions are omitted from the general statement on budgetary discipline and the generalised efforts which are allegedly to be made in future to control the continuing rise in farm prices. The lack of financial control at that level will be a reason in future just as it has been in the past for the failure to curb the recurring overspend on agriculture in particular and on the Community as a whole.

Mr. Marlow: The hon. Lady has made many important points, and she has made them well. We are debating the future of £120 million of public money. I know that the Opposition are as concerned about public money as we are, but can she send a Whip to whip round the Tea Room to see whether he can get more than two Opposition Back-Bench Members to attend this important debate?

Dr. McDonald: I suppose that I must thank the hon. Gentleman for his kind initial remarks and omit any reference to his additional remarks.
Not only is there a lack of financial control, which should have been the concern of the Council of Ministers when it worked on the agreement, but there is corruption, to which many hon. Members will refer. It has been nicely covered recently, in both The Times and The Guardian of

17 January, to the effect that the Mafia is extracting millions of pounds from the European Community. That claim is made by Italian members of the European Parliament. I am interested to see that they are prepared to make such comments.
That could mean that our additional payment of £119 million will not be devoted to useful purposes, despite the Minister's claim for its necessity to make up standing payments to agriculture, industry, energy and, to a limited extent, the social fund. In fact, these millions of pounds will disappear in an entirely corrupt manner.
Surely the Government should have been more seriously concerned about the level of accounting before they accepted the generalised agreement on budgetary discipline and regarded it as a sufficient basis for making this additional payment.

Mr. Teddy Taylor: The hon. Lady has obviously studied the budget papers with far more care than the majority of hon. Members present. She has explained how substantial sums have gone from this and other countries to pay the Mafia for destroying non-existent tomatoes or for the produce of non-existent farms. In her studies, has she found anything in the new proposals on budgetary discipline which would stop the Mafia from continuing to get millions of pounds for the destruction of millions of tonnes of non-existent tomatoes?

Dr. McDonald: I presume that the truth of the press reports must be validated. We need a full examination of them. My point is that the agreement on budgetary discipline is extremely general. The detailed matters of accounting procedure and so on, which were discussed in the Court of Auditors' report, obviously were not discussed as part of the agreement. Apart from the faults in the general agreement on budgetary discipline, unless the Commission gets better accounting procedures, money will continue to disappear not only at the hands of the Mafia, but in other ways. Certain activities of the Commission—for example, the storing of food and the losses from selling stored stock—are not properly presented in the Commission's accounts. The Court of Auditors' evidence on the matter is extremely important. Unless those matters are also dealt with, we shall continue to face problems of Community finance. I agree entirely with the hon. Gentleman's point.

Mr. Budgen: Is there not another problem, in that the EC has a Court of Auditors to comment somewhat from afar upon the way in which policy is carried out? If an individual nation state connives in or fails to investigate fraud within its borders, no supervisory body from the EC can force the conniving or ignoring nation state to deal with that fraud.

Dr. McDonald: I agree with the hon. Gentleman. There are two different problems, with one of which the Commission can deal to some extent. If some member states refuse to co-operate and plan to delay payment of the milk levy, the Commission has recourse to the European Court. I agree that connivance in fraud and lack of proper supervision in member states can account for the disappearance of money. We cannot talk about controlling Community expenditure unless we are prepared to examine it properly at every level. From the report of the Court of Auditors, it would appear that it is about time that Ministers turned their attention to this matter, not only in


their national Parliaments but in the Council of Ministers, so that something can be done to obtain much more stringent control of Community spending.

Mr. James Hill: Is it not true that the Court of Auditors, which was appointed only a short time ago, presents reports only after the event and that it is up to the national Governments to act on those reports? The Commission is not obliged to take any action.

Dr. McDonald: That is exactly what I was saying. The reports should be considered not only by national Governments, but by the Council of Ministers. I am sorry if the hon. Gentleman's attention wandered while I was trying to make that point.
This payment will be made from the Consolidated Fund and it is a Supplementary Estimate to that. The Minister did not tell us whether the additional money would come from the contingency reserve or whether it is additional public spending. If it is the latter, presumably it will squeeze out other public expenditure. We wish to know under which heading it falls. If it is additional public spending, what will be squeezed out?
The Minister said that the Government are justified in introducing the Supplementary Estimate because they have reached an agreement on budgetary discipline. However, his opening remarks highlighted the lack of budgetary discipline. He said that he hoped that it would not be necessary in future to make requests for such additional payments to the EC. However, he said that one could not be sure of that in relation to agriculture because of changes in the weather and in production. He should have added that we cannot be sure because the payments made by the Community under the heading of agriculture spending are demand-led. There can be no budgetary discipline until the common agricultural policy is reformed.
Hon. Members on both sides of the House have made that point repeatedly. Apart from the weaknesses in the wording of the agreement, we cannot achieve the budgetary discipline that the Government wish us to believe has been achieved in the 1984 negotiations without the fundamental reform of agricultural spending. It is bound to overrun the estimates. and it will cause us endless trouble in the years to come, just as it has in the past. Nothing has been achieved to end the trouble.
The Government have abandoned their original commitment to reform the CAP. They changed the terminology for their aims in the Community to talking about budgetary discipline and financial control. They are whistling in the wind if they believe that that has been achieved by any agreement. Other Ministers in the Community believe that it has not been achieved. Mr. Genscher, the German Foreign Minister, called it the budget of indiscipline. The French Agriculture Minister consoled the 2 million French farmers by telling them that they had nothing to worry about and that they would continue to receive money through the CAP.
The agreement is faulty because it creates many loopholes. It was not built into Community legislation, as the Prime Minister wished. The right hon. Lady would have preferred financial regulations, but she failed to get agreement for that from the other nine countries. This agreement represents conclusions which are binding on the Council but which are full of escape clauses. The agreement can be suspended in exceptional circumstances,

and its corrective mechanism can be set aside in the event of aberrant developments. There is no hope of budget discipline. Fundamental reform of the CAP has not been achieved, and the Government long ago abandoned that aim. The agreement is full of loopholes, and there is no attempt to impose stringent financial control on the Community at the level which the report of the Court of Auditors made abundantly clear is vital if spending is to be controlled.
For those reasons, we are opposed to spending another £119 million of our money on the Community simply to boost farm incomes yet again.

Mr. Terence Higgins: I shall make three initial points in the broad context of the Common Market. I believe profoundly that our membership of the Common Market has great political and economic advantages, and I have no doubt that those who take that view are right to support it. But it is essential that those who take that view should make it clear that if the Community is travelling on completely wrong lines, or if necessary reforms are not being carried out, we have a duty to speak out and to say that it is happening. I am surprised that many of those who have been enthusiastic supporters of the Common Market are not present for this debate to make some of the points that must be made.
It has long been the case that there is a basic inconsistency between the economic philosophy underlying the main part of the Common Market and that underlying the common agricultural policy. Until now, the price that we have had to pay for the overall benefits has been the disadvantages of the CAP. But now that limits on Community finance are finally coming into operation, we have an opportunity to reform the CAP. That is why it is important to consider carefully the financial position and the negotiations that have taken place.
My second point, again in the broad context, relates to the control of public expenditure. In recent days in the House we have had several debates among those who advocate tax cuts as a means of alleviating unemployment and those who advocate more expenditure on the infrastructure. It would be extremely silly if that debate were conducted in terms of black and white.
We must appraise whether a tax cut or item of public expenditure has merit. To divide it in this simple-minded way, however, is not a fruitful method of considering the matter. The Government's overall policy of seeking to control public expenditure effectively is important, especially if we are to get the economy right and deal with the problem of unemployment.
We are being asked to spend another £120 million, and that sum must be appraised against other possible claims on public expenditure. We have had passionate debates recently, for example about student grants. In that case, a cut has been made of £120,000 a year in the provision for adult education. Yet we are talking today of £120 million a year. We have also had passionate debates on overseas aid, broadcasting by Britain to overseas areas and capital payments by local authorities for housing.
The proposal before us seems inconsistent with the Chancellor's overall objective of reining back expenditure. It is clear from the evidence we took in Committee upstairs that this proposal has not been considered in


relation to the other items of public expenditure to which I have referred, some of which, compared with the sum we are now debating, are absolute candle ends.
We see from the face of the Estimate that it is not cash-limited. Why have we not adopted the same stringent approach in this case as we have in other areas that are cash-limited? Let us remember that we are not dealing with an obligation under the Community treaty as part of own resources. This is being paid over and above the limit on own resources to bail the Community out of a situation into which it has got itself. We did not get it into that situation, one which may be implicit in the mechanisms which need reforming. It is essential, therefore, that we put this in the overall context of public expenditure.

Mr. Russell Johnston: The right hon. Gentleman is being simplistic over this in the way in which he is criticising others for being so. It is not simply a question of saying that the Community has got us into this mess and that we have had no responsibility for it. We had a great deal of responsibility because we also failed to rein in agricultural production and persuade others to do likewise. It is not long since the Minister of Agriculture, Fisheries and Food was asking dairy farmers to produce, produce, produce.

Mr. Higgins: I am interested to hear that statement of Liberal agricultural policy, which will be noted in fanning constituencies.
The Treasury Select Committee has done a useful job in informing the House about the situation. There would not, under our previous procedures, have been any way in which the House could have understood the position as clearly as it can in the light of the evidence which we took on the Fontainbleau agreement, from the provision for budgetary discipline which was published with our autumn statement and report or from the evidence that we have had in recent days. The present system of Select Committee scrutiny is vital, and I pay tribute to the staff of the Committee, and the clerk in particular, because we have been under tremendous pressure of time.
The Government proposed originally to proceed under section 1(3) of the European Communities Act 1972. They went to the Statutory Instruments Committee on the issue and fought the matter through the High Court and Court of Appeal. Suddenly they threw the whole engine into reverse and decided to do it not by that means but by way of an Estimate. It is arguable whether they should not have done it by that means in the first place.
They said that they wanted to take it through the courts to establish the legal position over the so-called intergovernmental agreement. Why did the Government not go on to seek a clear judicial interpretation in the Lords on that point? We are now left with the matter rather like the smile on the Cheshire cat's face after the cat has gone. We need to know the legal obligation for the Estimate that we are being asked to approve.
The Minister has referred all the way through to the intergovernmental agreement, but that argument was adduced when the Government proposed to use the other procedure. The legal obligation from the point of view of the Estimate is not clear, though one cannot help but note that it says on the face of it that it is being done
under the sole authority…of the Supplementary Estimate and the confirming Appropriation Act.

I hope that the Minister will make it clear whether this is being done under the intergovernmental agreement. The House is entitled to an answer to that straightforward question. If it is a straight Estimate, is additional public expenditure, is not cash-limited and if we have no legal obligation, that information is relevant to our deciding whether this money should be spent.
We are talking here of £120 million. On 17 January we were told in answer to a written parliamentary question that another £99 million would be advanced out of the Contingencies Fund and that it would eventually be clawed back under the Consolidated Fund, a procedure used by the Government on several previous occasions. That may have been an appropriate, if debatable, procedure on those previous occasions.
I am not clear why we should be paying that other £99 million out of the Contingencies Fund with a proposal to claw it back under the Consolidated Fund when we have a perfectly good occasion—today—to do it by way of an ordinary Estimate, plus a perfectly good occasion—under the Consolidated Fund Bill tomorrow—to deal with it, and why the two have been separated instead of being taken together.
We were told clearly by the Prime Minister some months ago that it was not right for the EEC to raise loans for budgetary purposes. However, we are suddenly being told, "We propose to make instead a reimbursable advance." As a semantic joke, this is an interesting way of going about it. But in terms of substance—despite the efforts of the Parliamentary Secretary to the Treasury, in evidence to the Committee upstairs, to differentiate the two—we in the Committee do not see any real difference. It is contrary to the spirit, and perhaps to the letter, of the treaty that we should advance this money and then claw it back.
In answering questions about that, an official of the Department said that under an arrangement made in 1980 there was provision for the Community to receive other revenue, and he referred to its ability to receive gifts or bequests. Apparently this Estimate comes into the category of gifts or bequests, and hon. Members may wish to bear that in mind when deciding whether to approve it.
However, it is being categorised as "other revenue". I have difficulty over that because it has always seemed to me important to distinguish between loans and revenue. If it is revenue, one has it; if it is a loan, one must give it back. How is it, therefore, that we should be making a reimbursable advance under a provision which allows the Community to receive revenue? The mind boggles. The matter is very worrying, and I hope that my hon. Friend will give us some answer today.
The truth is that the arrangement has been a matter of pure political expediency. By next weekend I understand that the Community will be literally out of money. We must therefore ask whether budgetary discipline, which we were told was to be a hard and fast condition, is to be effective.

Mr. Hugh Dykes: My right hon. Friend speaks with authority, and we listen with great interest to what he says. However, although my right hon. Friend has talked about the dangers of taking a simplistic view and of seeing things in black and white, I fear that he is in danger of being carried away. The combined aggregate deficits of all the member states amount to well over £100 billion, and we are still talking about temporary


arrangements for a Community budget that is virtuous in that its receipts normally equal its payments, and it has no deficit at all.

Mr. Higgins: I wish that we could see the matter in terms of black and white. The trouble is that we are in the middle of a greyish fog. The entire picture is being befogged by semantic and other devices.
That is certainly so in the case of budgetary discipline. We were told that we would not hand over the money without effective provisions for budgetary discipline. Yet we are now told that such provisions are not to be incorporated, as I believe that my right hon. Friend the Prime Minister would have wished, in the major formal mechanism of the Community. We are also told that we are not to have an effective veto in the case of the reference framework. More particularly, we are told that the system is to work on a basis of clawback. If there is to be effective discipline on the basis of clawback running several years ahead, that is a very strange arrangement.
We all know that the real problem is that, because of the way in which the common agricultural policy operates, it is not possible to forecast what the commitment will be. One could deal with that problem simply by providing so much headroom so that at no conceivable prices would we run out of money. That might be appropriate. However, the reality is that we ought to be able, within reasonable limits, to predict the cost. That means that we must change the CAP itself, and that is something that, clearly, the budgetary discipline procedure is not capable of doing, and will not be capable of doing.
There must be a reform in that area, and the opportunity for that reform arises when the Community runs out of money. It has now done so. We are in danger of missing our opportunity. Before we consider the question of increasing own resources, we must ensure that we do not have a system of budgetary discipline of the kind that is now said to be acceptable. It may be said to be acceptable but, for all the reasons already given, it will not be effective. If the Community itself is to make real progress and to be of benefit to all its members, we must carry out a real reform.
We are told that agricultural expenditure will not rise faster than the general increase in expenditure. I have heard no case whatsoever made for any increase at all in agricultural expenditure. We know perfectly well that there are obscene surpluses in many agricultural products, and that they are getting steadily worse. Instead of accepting that the rise will be no steeper, we should simply have said that there must be no increase in agricultural expenditure. There is no case for such an increase, especially against the background of the Chancellor's stringent budgetary attitude to the overall management of our own economy.
I therefore believe that the present situation is very dangerous. However, our final opportunity for dealing with the matter has not yet been lost. The proposals for an increase in own resources are still to come forward. We should not accept them unless there are reforms such as I have suggested.

Mr. J. Enoch Powell: It is difficult to know whether this day's doings are more discreditable to the Government or to the Opposition. There is a period in politics which is peculiarly dangerous to the maintenance

of the rights and powers of the House. We are at present in such a period. The Opposition are divided, discouraged and discredited, their attention is fixed upon matters and problems outside the House, they are not able to give their full attention to duties in the House of Commons.

Mr. George Foulkes: Will the right hon. Gentleman give way?

Mr. Powell: I will give way at this stage, if I must. However, as I shall have much more to say about the Opposition later on, the hon. Gentleman might find it more economical to wait.

Mr. Foulkes: I am sure that the right hon. Gentleman will have much more to say about the Opposition. However, my hon. Friend the Member for Thurrock (Dr. McDonald) and I, as the official spokesmer. for the Opposition, have heard and will hear every word in the debate. It is our responsibility to speak for the Opposition in this debate, and we will discharge that responsibility. [HON. MEMBERS: "Where are the others?"]

Mr. Powell: I do not deny that it so happens for once that the Front Bench is manned. Clearly it is somewhat sparsely manned; but the hon. Gentleman is right to say that it is manned. But there is no need for the Opposition to be over-sensitive. I have more to say, and the Opposition spokesmen can then share the honours with the two juniors on the Government Front Bench.
The Government, in such a period as this, present a combination of two dangers. They have a large majority in the House, which enables them to feel that, with the assistance of the Whips, they can put anything through. They have also got themselves into a jam with their programme for the Session, so are terrified of being unable to find the necessary parliamentary time for the things to which they are committed. That combination provides the ideal circumstances for such inroads on the rights of the House as are represented by the manner in which this business is brought before us.
The object of the Opposition today—their one achievement, which was snatched from them—had been to connive with the Government to restrict the time that the House could spend—even under the present arrangements—in discussing the matter. How undesirable that would have been is evident already from the speech which we have been able to have the advantage of hearing from the right hon. Member for Worthing (Mr. Higgins).
The Government's object has been equally clear, and equally adverse to the power and rights of the House. Their aim has been at all costs to avoid any risk of having to legislate. At all costs they wish to withhold from the House the supreme method by which, when asked for money, it examines in detail the reasons why the money is requested, the manner in which it is to be used and the conditions under which it is called for.
A shoddy story lies behind today's proceedings. The Government began by claiming that they could deal with the matter by an Order in Council under section 1(3) of the infamous European Communities Act 1972. Thanks to the public spirit of a private citizen, that proposition was tested both in the High Court and in the Court of Appeal, and the Government expressed themselves satisifed with the result. However, they did not proceed in that way, after


all. They told the Treasury and Civil Service Select Committee the reason why: the reason why they did not proceed was
for the avoidance of doubt".
So in the mind of the Government there was still a doubt whether, if they proceeded by Order in Council, that might be found defective when it was again tested—as it could be—in the courts not under a prerogative writ but as an order which purported to have already been duly passed by both Houses. What would have been the difficulty for the Government, what embarrassment would they have faced, if that doubt had proved well founded? They would not have lost the opportunity of making the payment, they would not have been prevented from making the payment, by discovering that the order was ultra vires and not within the terms of section 1(3) of the 1972 Act. No, they were afraid that they would have to legislate. It would have been necessary for them, if they could not make an order under section 1(3), to resort to primary legislation, and primary legislation—the opportunity for the House to consider in legislative form what was being asked of it—was what the Government were determined not to face. They therefore resorted to a method which they reckoned would as effectively as possible abort debate by the House: they proceeded by putting the sum in a special Estimate and then having a Consolidated Fund Bill to give it statutory approval.
That procedure has been considered in the past by the House and its Committees. It is a procedure to which the House, for obvious reasons, has been steadily hostile. The outcome of those historic occasions is summed up in page 791 of "Erskine May" by the statement:
the Treasury, in answer to such comments, have justified the practice on grounds of emergency rather than of principle.
I had, I must admit, assumed when I was preparing these remarks that, in laying the Estimate before the House, the Minister would at least have had the courtesy of referring to this breach of the normal procedure required by the House—this disregard of the House's objections to proceeding by way of Estimate—and would have explained whether this is indeed an emergency. "Emergency", as it is used in that passage of "Erskine May", does not, however, mean that the money is needed in a hurry to meet circumstances long foreseen. It means a genuine emergency which can only be met by a payment made there and then and which could not have been foreseen. It was only in such circumstances as those that the House agreed with the Treasury that money may legally be granted by means of an Estimate followed by a Consolidated Fund Bill. The net result has been to deprive the House of the opportunity of proceeding by way of legislation.
This is a matter on which the Government are on record in the present Session. I can quote the Government against themselves. It is not long since we passed the Second Reading of the Milk (Cessation of Production) Bill—quite an interesting parallel case to what is before the House today. The Minister, in introducing the Bill on Second Reading, said:
it was clearly right that specific statutory authority should be obtained as soon as an opportunity in the legislative programme could be found. I made it clear at an early stage that I would seek this authority as soon as possible."—[Official Report, 10 January 1985; Vol. 70, c. 917.]

That was authority which, in the terms of what the Government are doing today, was not necessary, for there was already an Estimate covered by a Consolidated Fund Act which covered the payments being made by the Ministry of Agriculture, Fisheries and Food. Nevertheless, speaking for the Government, the Minister enunciated the correct principle—that as soon as possible in such a case, statutory authority must be secured.
We must consider the Minister of Agriculture, Fisheries and Food lucky to get a Bill which put him right with the House. The House was able duly to give statutory authority to the payments being made. The method the Government have adopted today is designed to prevent any such thing—to prevent the House from being able to consider, in terms of a Bill, the justification for what is being asked of it.
This is something which cannot be defended or just brushed down by today's brief debate. Indeed, in any Parliament—I am now coming back to the Opposition—in which an effective Opposition was functioning, the Opposition would have used the powers which Oppositions have to see that, on the Government Front Bench, was the Chancellor of the Exchequer himself accompanied, if necessary, by the Prime Minister, nothing less, to try to justify to the House the insult which is offered it by the deliberate choice of this method of avoiding legislation.
The thing is even worse than that. It is not isolated or insulated, not just one payment in isolation for which authority is being sought in an improper way so that we might shrug it off and forget as it recedes into the past. The Government's agreement to make what the right hon. Member for Worthing (Mr. Higgins) said must be either a gift or a bequest under the rules of the Community—their agreement with other Governments to steamroller Parliament into authorising this payment—was not an agreement made in isolation. The agreement was part of a package, in another part of which the Government consented in principle to an increase in the Community's own resources.
So one element in that package is being fulfilled without the opportunity of the whole package and its justification being properly explained and debated in the House. We shall be told, and our partners in the Community would be justified in telling us, "Well, you have accepted the package, for you implemented the first element in it by making this special payment, whatever it be—loan, bequest or gift." We shall yet see the Government coming back to the House and reminding us that we have already entered the process of implementing the Fontainebleau agreement. So by the hem of the garment, a kind of presumptive acceptance by this House of that agreement has been secured by these anti-parliamentary means.

The Minister of State, Foreign and Commonwealth Office (Mr. Malcolm Rifkind): The right hon. Gentleman is uncharacteristically incorrect. The Government agreed to recommend an intergovernmental agreement of the type that is before the House on condition that two factors are satisfied. The first was that the British refund was paid—it has been—and the second was that there were satisfactory arrangements for budgetary discipline. The right hon. Gentleman will be aware that the Government asked the House for its approval of what had been agreed on in regard to budgetary discipline in a


debate on 11 December 1984. At the end of that debate, the House unanimously endorsed the Government's motion.

Mr. Powell: The Minister is evidently under the impression that what is called unanimous endorsement in the course of that type of debate is a substitute for parliamentary authority to what is necessary as a consequence of the agreement of which the budgetary directive is a part. That budgetary agreement, on which there was no Division, is integrally connected with an agreement in principle, given by the Government on behalf of this country, to up the own resources of the Community. Now the ne plus ultra, the line which, from the beginning of our entry into the Community, was advertised to the House and to the public, who were told, "It is quite all right, it is only 1 per cent. worth to which you are committed," was that if ever — and it was extremely unlikely—the Community were to dare to propose that the percentage should be increased to 1·2 per cent. or 1·4 per cent. or 1·8 per cent. — the hon. Member for Inverness, Nairn and Lochaber (Mr. Johnson) thinks of 2 per cent.—it would be necessary to legislate once again. We were told, all through those weary months, that, if that happened, the whole issue would have to be reopened; there would have to be proper legislation in full form to authorise any such change.

Mr. Forth: Does the right hon. Gentleman's memory conform with mine in this matter? Have we been given an undertaking that the request for an increase in the Community resources will be brought to the House only when the enlargement negotiations have been concluded, and that therefore there is another contingent factor? We are being asked to agree that the enlargement of the Community to include Spain and Portugal will also require an increase in the Community resources, and these two are being linked by the Government.

Mr. Powell: There is almost no limit to what can be extorted by what I might call the package principle, on which the European Community operates.
This afternoon, we shall need from the Government the clearest possible assurance that there will be no question of section 1(3) being used to increase the own resources of the Community, and that, notwithstanding the wrong that has been done in the payment of this sum of £119 million, there will be full legislation to authorise any such change. This resolution could be drawn by the Government into a precedent by which we could be cheated out of our right to full legislative opportunity whenever that proposition is made to us, to debate where we stand, where the Community is going, and whether the House and the nation are in agreement with what is involved.
It is fortunate that the cosy agreement that had been made between the two sides of the House—always a sign that somebody will be cheated out of something—was aborted by the presence of mind of one or two private Members, so that we are in a position, if we find it necessary and desirable—that is a matter for the House to decide — to debate this, under our rules, until 10 o'clock. At any rate, a protest has been entered against the wrong that has been done to the House.

Mr. Michael Knowles: My position is analogous to that of my right hon. Friend the

Member for Worthing (Mr. Higgins) in that I am one of those who have always supported our membership of the Community and would wish it to be developed. However, like him, I feel that there is a duty on people who hold that position to be most critical when they see things that are wrong. That is true of agricultural funding in the Community. Any demand-led expenditure is, by its very nature, open-ended, as we all know. If we do not have a cash limit, and expenditure is demand-led, we are asking for large bills, and that is what we have. If we do not close that loophole, we shall constantly have to find fresh resources for agriculture. Sooner or later we must deal with that problem. I would like to think that at Fontainebleau we have achieved budgetary discipline, but like other hon. Members I am a little sceptical. I shall wait and see, because we have heard it before.
Other hon. Members have asked why the Government wished to present this matter to the House in this form. I shall concentrate on an earlier point. Why have we arrived here through an intergovernmental agreement rather than working through European institutions? That question highlights the problems that we have in the Community. National Governments wish to keep power to themselves, so we have cramped and limited those institutions, and we have not allowed them to develop properly. We then promptly shriek that they are not working effectively, although it is we who have crippled them. It is not surprising that they do not work effectively.
Some hon. Members have spoken about fraud going on, perhaps with official connivance, in some Community countries. The logical solution is that the Community should have its own investigative sources to deal with such problems, but I can imagine what the same hon. Members would say if such a proposal came before the House. They would be the first to object. I can write the Daily Express headline now.
This Supplementary Estimate is separate from the increase in VAT, but it derives from the same settlement at Fontainebleau. At Fontainebleau, the Government had three conditions, and we have forgotten how crucial they seemed at the time. The first was the release of the 1983 refunds. One can remember the arguments in the House about those refunds and how important they seemed. Those refunds have now been released. The second condition was effective arrangements on budgetary' discipline. We now have arrangements, although I confess I am a little dubious about them. However, the Government are satisfied. The third condition was parliamentary approval, which is what today's debate is about.
One thing that might aid budgetary discipline in the new financial situation is that West Germany and France will become payers. When just one of the larger members was a net payer into the Community, we were fighting a lonely battle. The odds have tilted slightly now. Once it becomes in someone's interest to retain financial discipline, he has more interest in doing so.
Although I am trying to be helpful to the Government, I am not sure whether my next point will be so. I am in favour of it, but I know that hon. Members on both sides of the House may disagree with it. It is that an implicit part of the Fontainebleau agreement was that what was expected was political delivery from this country. We had stopped haggling about finance, which we had been doing for years, thereby preventing talk about political


development in the Community. Our partners in the Community will now expect us to deliver. As the Prime Minister said about the Fontainebleau agreement:
It will make possible a relaunching of the Community in which Britain will play a full role".
I am in favour of that, but, judging by what has been said in the debate, I am not sure whether some of my hon. Friends will be.
The Stuttgart agreement was even more explicit about European union, and statements were made during the recent visit to Chancellor Kohl. Now, the rest of the Community wants closer co-operation and unification. We promised it, we keep on signing the bits of paper, and sooner or later we shall have to deliver, and I think that will be this year.

Mr. Eric Deakins: Under what authority did the Government pledge this country to greater unity, particularly political unity, beyond what is already implied in the European Communities Act 1972?

Mr. Knowles: The European Communities treaty says nothing beyond what is in it and that is the authority. The words of the preamble say:
to lay the foundations of an ever-closer union among the peoples of Europe".
It speaks not of the Governments but of the peoples of Europe. All that has been said has reinforced what we signed 12 or 13 years ago. This year, our partners will ask us to start delivering politically.

Mr. Dykes: Does my hon. Friend agree that in the document submitted by Her Majesty's Government to the Fontainebleau meeting there was an emphatic commitment—reiterated more than once — to the vital need for greater majority voting in more areas on more subjects?

Mr. Knowles: My hon. Friend is correct. My point to the Government is that that pressure will come on us. Rather than just sitting still and objecting to other people's initiatives when they come, could we change our stance? This year, could the Government bring forward their own initiatives and tell us what their vision of Europe is? They might find that they have many friends, not only in the House and in the country but across Europe.

Several Hon. Members: rose—

Mr. Speaker: Mrs. Ann Clwyd.

Mr. Beaumont-Dark: On a point of order, Mr. Speaker. Some hon. Members have been sitting here all afternoon. The hon. Member for Cynon Valley (Mrs. Clwyd) has only just come into the Chamber. Is that the abuse that is to go on?

Mr. Speaker: Order. The hon. Lady was in the Chamber when I arrived. She had told me by letter that she wished to take part in the debate. I had not realised that she had just come in, but I have called her.

Mrs. Ann Clwyd: That is not true, Mr. Speaker. If the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) had looked earlier, he might have seen me here for a considerable part of the opening of the debate.
The European Community budget is not large. In 1984 the total budget was about one eighth of the national

budget of this country. Of this relatively small budget about two thirds go on agricultural policy, as my hon. Friends have made clear. A third of what is left goes on the regional and social funds. Even allowing for administrative expenses, one might expect a good proportion of what remains to be devoted to the development of new European Community policies, particularly in the vital areas of technology, research and energy. This is far from being the case. In 1984 it accounted for only 2·56 per cent. of the budget. In the draft budget for 1985 the percentage is slightly higher at 2·59.
As my hon. Friend the Member for Thurrock (Dr. McDonald) questioned, rightly, how much of this part of the budget will actually come to us? There is a greater discrepancy between Community spending on technology, research and energy and its spending on agriculture. Vital as the common agricultural policy may be, it is worrying to note that, for example, the payment appropriation in the 1985 draft budget for ESPRIT is little more than one fifth of that for production aid for tomato-based products—

Mr. Phillip Oppenheim: rose—

Mrs. Clwyd: —yet ESPRIT has been hailed by national Governments and Community institutions alike as a key element in the Community's fight to become competitive in new information technology. The energy appropriations, therefore, do not reflect the true needs of Community energy policy as laid down in numerous resolutions of the European Parliament. In particular, they do not reflect the need for a constructive and balanced solid fuels policy.
This argument has been made again and again by my former colleagues in the European Parliament, in the Rinsche report, prepared following a resolution presented by myself to the European Parliament on the imminent threat of closure of British coal mines, in the Rogalla report on financial support for industries producing solid fuel, in the Quin opinion on the same subject and in the opinion voiced by Gordon Adam as budget rapporteur for the energy committee. Since we are talking about the estimates, it is important that we argue that Community money and our money should be spent in the most sensible and appropriate ways.

Mr. Oppenheim: The hon. Lady has stated that it is ludicrous that so much Community money should be spent on agriculture and such a small proportion on other items such as information technology. Is it surprising if the majority of EC spending is on agriculture when that is the only really international EC policy? Almost all other items, such as regional aid, information technology support and industry support are covered by national budgets. If the hon. Lady considers the British budget for industrial support, information technology and other such matters, it outspends agriculture by a factor of about 3:1.

Mrs. Clwyd: The hon. Gentleman is obviously not aware of how the budget works, otherwise he would know that national Governments still spend money on agriculture.

Mr. Oppenheim: A very small proportion.

Mrs. Clwyd: The Rogalla report sets out clearly the failure of the Community to translate firm declarations for a strengthened solid fuel industry into practical measures.


For this failure the Council of Ministers is clearly responsible. Unless present EC policies are changed, the coal industries of member countries face continued decline and eventual eradication.
Community strategy to reduce dependence on imported oil has been relatively effective but at the same time the Community has become dangerously dependent on imported coal. The international coal report of January 1985, published by the Financial Times, shows that, according to Trade and Industry Department statistics, United Kingdom imports in the first 11 months of 1984 were running at more than double 1983 levels. By the end of November 10·1 million tonnes had been imported at a price of £59·46 per tonne whereas comparable British coal could have been produced for between £44 and £57 per tonne. Similarly, anthracite, which is being imported at £112 per tonne, can be bought on the British market for between £44 and £70 per tonne.
Two features paramount in the increase in imports have been substantial imports of house coal from all sources, and substantial imports of industrial coal, largely from the United States and South Africa. Many people believe that the new business will not cease when the strike ends. By contrast, in an effort to protect markets in videos and computers, the ESPRIT programme has been established. The same approach is needed in the Community to defend our coal markets.
The only current policy of the Community is to close pits. This is particularly important to us when we are talking about our money, which goes into the budget. The Commission argues that a sudden substantial drop in Community coal production would lead to a major rise in world selling prices. At the same time it argues that there must be investment in new production. There is a serious weakness in the Commission's documents. It is not fully realised that there is considerable potential to develop new mines which would be fully competitive with imported coal at current prices.
There are no technical reasons why an additional capacity of 120,000 tonnes per year could not be brought into production, given the will to invest. The investment cannot be carried out in five minutes. We should argue for this investment here and now. If we get the necessary investment in energy it would allow for a period of transition and protection for pits under threat of closure. The social implications and the implications for regional economies must be taken into account. [Interruption.] Financial aid for coal stocks should be provided in the transition period.
Secure markets are needed for the coal to be produced. The opportunity for commitment was present during the 1984 budget procedure. I suggest to those Conservative Members who have been arguing that this has nothing to do with the subject under discussion that they listen more closely. It must be noted that the Council failed miserably to take up the challenge. The report by Albert and Ball on European economic recovery, which was initiated by the colleagues of some Conservative Back Benchers, argued that employment and economic recovery in Europe depend heavily on investment in the energy section.
A recent opinion on the regulations concerning financial support by the Community for industries producing solid fuel argued against some Commission proposals. The Commission has put forward an amended set of proposals on investment in energy and the eligibility criteria have been tightened rather than made more

flexible. The Community level of investment potentially qualifying for support has been reduced from 1,520 million ecu to 1,200 million ecu and the total proposed Community funding for investment support has been reduced from 300 million ecu to 200 million ecu. In addition, the Commission has dropped its original proposal of aid for the running down of coal stocks
in view of the need for tighter budgetary discipline.
If only the same rules applied to the CAP.
The Commission states that production in Community coal-producing countries has fallen from 241 million tonnes in 1982 to 229 million tonnes in 1983, with a further reduction of 9 million tonnes likely in 1984 even without the effects of the coal strike in the United Kingdom. The Commission's conclusion is that the Community coal industry continues to have great difficulty in financing essential investment. It is unfortunate to say the least that the Commission's latest proposals will make it more difficult to finance needed investment than the Commission's original proposals.
The Commission is maintaining its simplistic threshold figures and it has actually increased them so as to make fewer investments eligible for support. The Commission has taken a narrow view of the value of Community investment in the coal industry, and has taken insufficient account of the importance of such investment for the coal mining regions of Europe where, typically, unemployment is high and alternative employment possibilities are low.
To link investment to levels of output per man shift is nonsense.

Mr. Higgins: rose—

Mrs. Clwyd: I shall not give way now. I shall do so when I have completed this argument.
To link investment to levels of output per man shift is nonsense. As we have been arguing in South Wales for years, there is a direct correlation between the investment that a pit receives and its capacity to produce coal. No investment means inevitably decreasing productivity. There is a classic "Catch 22" situation — a declining spiral of low investment and low productivity—and that is exactly the position in which south Wales finds itself. The Commission's recommendations would deny south Wales investment and pile still more into the productive power station coal producers, which would succeed only in making that market even more vulnerable to glut. What co-ordination exists between the Commission's strategy and that of the National Coal Board and the Government? Is the case for increased investment being urged in the corridors of the EEC?
A fourth group of academics and accountants have now challenged the accounting reports of the NCB and the board has appointed independent accountants to assess its accounting techniques. Arguments about the economic viability of individual pits are at the core of the coal dispute, yet the fundamental accounting information that is used in public debate appears to be suspect. The question that the most recent group of academics has posed—the group includes a Price Waterhouse professor of accounting at Manchester—is the difficulty of achieving informed public debate—

Mr. Forth: On a point of order, Mr. Speaker. I am reluctant to raise this matter but I am driven to do so. I am trying hard to relate the remarks of the hon. Member for Cynon Valley (Mrs. Clwyd) to the debate. I am wondering


whether she is trying to use the debate as a way of securing a discussion of the coal industry and the dispute through the back door. Will you please advise the hon. Lady whether she is in order, Mr. Speaker?

Mr. J. Enoch Powell: Further to that point of order, Mr. Speaker. Is it not the case that we are having an Estimates debate on supplementary finance to the budget of the European Communities? Is it not in accordance with our normal procedure when debating Estimates that an hon. Member can refer to any matter that falls within the budget?

Mr. Nigel Spearing: Further to the point of order, Mr. Speaker. May I draw to your attention and that of the House, including the hon. Member for Mid-Worcestershire (Mr. Forth), the written answer to one of my questions which appeared on 10 January? It states that the Supplementary Estimates before us include an extra 134 million ecu for "Industry, Energy etc". Is not energy policy and expenditure on our indigenous coal resources well within the scope of the debate?

Mr. Speaker: I am obliged to the right hon. Member for South Down (Mr. Powell) and the hon. Member for Newham, South (Mr. Spearing) for their help. They are entirely correct and the hon. Lady is not out of order.

Mrs. Clwyd: Thank you very much, Mr. Deputy Speaker. If Conservative Members had waited a little longer, they would have managed to associate my remarks with the Estimates.
If we are to convince our colleagues in the European Community that they must increase the share of the budget to be spent on energy policy, we must set up as soon as possible an independent review body as proposed by the churches in Wales and supported by the NUM nationally, Labour Members, Liberals and Plaid Cymru Members. The sooner that is discussed the sooner we can get back to talking rationally with our EEC partners about a common energy policy. There is the realisation that both "Plan for Coal" and the National Coal Board proposals for 1984 have been overtaken by subsequent events. The events include the loss of production of between 60 million and 70 million tonnes, the fall in the value of the pound and the effect of that on the cost of foreign coal, the possible loss of markets and the deteriorating situation in mining communities. These factors have strengthened support for the initiative of the church leaders.
I am sure that our colleagues in the European Parliament will shortly be suggesting to us that the Government should set up an independent review body, that there should be no pit closures until that body presents its report and that the review body should report on a date that is agreed jointly between the parties in the dispute. I am sure also that our partners in the Community who are concerned about the Community's future energy policy and the tonnage that each coal-producing member is producing believe that these proposals are capable of enabling the parties to the dispute to resume negotiations and to bring the strike to an end.
In view of our anxiety to get our just share of energy investment from the EEC budget, why should any democratic Government choose continued confrontation rather than bringing an economically and socially

damaging strike to an end? The assertion of the Chancellor of the Exchequer that the destruction of a great union and the suffering of thousands of men, women and children is a worthwhile investment in the future of the British economy must be received by our EEC partners with horror and incredulity. The Government's perverted charade of non-involvement in the strike, while making it known that they are opposed to the very idea of a negotiated settlement, is a demonstration that they are washing their hands of national interests and the interests of the community.
It will be a hollow victory if the Government sit back and wait for the miners to return to work. In south Wales only 1 per cent. of the mining work force has returned to work. Whatever the outcome of the strike, we in south Wales will be able to walk tall. If the Prime Minister has learnt anything from the Falklands war, it should be that when people want to talk about peace their efforts should not be torpedoed. The Government bear a responsibility because without a negotiated settlement employee-employer relationships in the coal industry will be in turmoil for years to come.
Finally, the Prime Minister ought not to look at this as a fight to the finish. Mr. Scargill—

Mr. Speaker: Order. I think that the hon. Lady is straying rather widely from the Estimates, which have nothing to do with the solution to the strike.

Mrs. Clwyd: I have just one more sentence to deliver, Mr. Speaker.
Mr. Scargill has said that he wants to negotiate—

Mr. Speaker: Order. The hon. Lady will have to be a little more ingenious than that.

Mrs. Clwyd: My colleagues in the European Community will, of course, be pleased, as we all are, to hear that Mr. Scargill wants to negotiate. They will be glad to know that he has said that he is prepared to return to the negotiating table without preconditions. I am sure that they will join my hon. Friends in saying that, to ensure the future of a great industry, an industry which can contribute much to the European Community, the Prime Minister should do the same.

Mr. Roger Freeman: After that interesting interlude, may I return briefly to the mainstream of the debate, as a strong supporter of the European Community and one who regards the measure before the House as inevitable and sad? However, I do not intend to waste any time crying over spilt milk. It is more important to concentrate on the shortcomings as I see them of the proposed budgetary discipline to which the Minister referred in opening the debate. I wish to raise three points concerning the proposed budgetary discipline regime.
The first is the degree of real control over expenditure and the evidence that the House has before it of the steps taken during 1984 to control that expenditure. We are told that the expenditure overrun was reduced from 2·3 million ecu to about 1 million ecu — the Herculean task to which the Minister referred in opening the debate. However, when one examines the documents a little more carefully, one sees that it amounts to not such a tremendous feat of controlling revenue expenditure as first appears.
The Minister of State, on 10 July 1984, told the House in a written answer that one way of controlling expenditure was simply to defer cash expenditure from 1984 into 1985. Indeed, in evidence to the Treasury and Civil Service Select Committee on 29 October 1984, the Economic Secretary referred to another way of controlling the overrun this year — by bringing forward sugar levies from 1985 into 1984. I submit that cash management, albeit sophisticated cash management, is no substitute for proper control of revenues. I am somewhat saddened to note that in evidence to the Select Committee the Economic Secretary cited 150 million ecu as the only example of a reduction in revenue expenditure in fiscal 1984. That arose apparently from changes in policy towards destocking items in surplus. The figure of 150 million ecu represents 0·6 per cent. of the budget. I submit that there is little evidence thus far of proper economies in Community expenditure being achieved.
The second of my three points concerns the timing of the introduction of the budgetary discipline and the so-called clawback mechanism, which I think on closer examination turns out to be not a clawback at all. It should be drawn to the attention of the House that the budgetary discipline mechanism does not become effective until 1986, a year in which it is assumed that the new value added tax ceiling will be higher than 1 per cent.
In volume II of the Government's public expenditure White Paper which was published this afternoon, I note that there is, indeed, an assumption that a supplementary budget will be brought before the House during this calendar year. Doubtless that is an assumption, but it is important for the House to appreciate that the new regime begins in 1986, that there is a two-year period in which the Ministers of Agriculture must try to control excessive expenditure and that therefore the first year in which we in this country can expect to see the benefits of any corrective mechanism or action taken under the budget discipline is 1989. In 1986, the rules will come into operation, and there is a two-year period following 1986 for intervention prices to be altered. Therefore, the benefits will not accrue until 1989. I submit that that is a very long period in which to correct excessive expenditure.

Mr. Budgen: My hon. Friend omits to mention clause 2 of the Fontainebleau agreement which states that the maximum rate may be increased to 1·6 per cent. on 1 January 1988 by unanimous decision of the Council. Although not a legal commitment, that was surely a moral commitment by the signatories to make a further increase in own resources in 1988 should that be necessary.

Mr. Freeman: I think that my hon. Friend is wrong.

Mr. Budgen: Why?

Mr. Freeman: I will explain, if I may, why my hon. Friend's point is not directly relevant to the point that I am trying to argue. The budgetary discipline measures proposed and accepted relate to the increase in the size of the value added tax resource base. The rate of payment, whether it is 1 per cent., 1·4 per cent. or 1·6 per cent., is not directly relevant to the control of the increase in agricultural expenditure.
If I may develop the second point a little further, I wish to draw to the attention of the House the fact that the clawback mechanism is not quite as effective as it may at first seem. I refer here to article 5:

In the event of failure to respect the qualitative guideline referred to in Article 2"—
that is, the control of agricultural expenditure—
the Council shall, during the following two financial years"—
and I have already referred to the timetable effect of that—
ensure that, barring aberrant developments, agricultural expenditure is brought back within the limits imposed by this guideline.
There is no mechanism for recovering excessive agricultural expenditure, and it is important that the House should appreciate that.
The third of my three points relates to the rate of increase of agricultural expenditure. I believe that the Treasury and Civil Service Select Committee has done a service to the House by drawing attention to the fact that no specific percentage has been identified by Ministers as the lower rate at which agricultural spending shall rise in relation to the growth in the value added tax own resource base. In evidence to the Treasury and Civil Service Select Committee, the Minister effectively admitted that the limit was the increase in the VAT resource base rather than holding out the hope to the House or to the country that agricultural spending would be limited to a lesser rate of growth.
In conclusion, I believe that the pressures of greater agricultural spending are already evident. As my right hon. Friend the Member for Worthing (Mr. Higgins) said, we are asked to advance a payment of the monthly VAT sums and, while that has nothing to do with this debate, it is a sign that in 1985 the pressure of agricultural spending above budget may already be there.
Unless we move to a system of cash limits, which I favour but which is complicated, the only way to control agricultural spending—the test will come this spring—is for the Ministers of Agriculture to resolve the issue and to make certain that agricultural spending in 1985. and not 1989, is controlled and rises by less than the increase in our VAT own resources base.

Mr. Russell Johnston: I, too, shall be brief. I agreed very much with the last point made by the hon. Member for Kettering (Mr. Freeman). I shall return to agriculture later, but what the hon. Gentleman said is the essence of the matter, and he is quite right.
The Minister did not seem to be actually unhappy, but he was far from bubbling, boisterous or buoyant. He explained the situation very clearly. It is certainly unsatisfactory. It might also be described as messy. It boils down to the choice between contributing to easing the problem or actually making it worse. I agreed with most of the comments of the right hon. Member for Worthing (Mr. Higgins). One of the things that weary me about these debates is the habit of many hon. Members—one or two of them are here today—of asserting that everything that is wrong with the Community is the fault of others, as though we had no share in the responsibility. Our agriculture Ministers share the responsibility for failing to get a grip of the CAP more quickly. We cannot dodge that.

Mr. Forth: Does the hon. Gentleman agree that the British Government have been virtually alone in pressing for the use of the price mechanism in a real attempt to control agricultural output, but have been thwarted by almost all other members of the Community? Surely it is legitimate to say that we, almost alone, have struggled for


many years to bring the price mechanism to bear on the problem of agricultural surpluses but have been denied any results by the concerted efforts of other member states.

Mr. Johnston: I do not entirely agree, although it would take a long time to argue the matter. The agricultural element in the United Kingdom is smaller and thus less politically significant whereas in France it is clearly a major factor. All Governments to some extent respond to pressure from their constituents, although I do not deny that what the hon. Gentleman says is partly true. When we signed the treaty in 1973, all the other member states took that to mean that we accepted the situation as it then was. Our apparently continuous failure to do so has thus caused considerable resentment.
It has been clear for the past five years that a continued open-ended system of agricultural support was bound to lead to trouble, compounded by the seldom mentioned fact that the problem is not just open-ended production with the need for subsidy capping, as it were, but the rapid and expensive result of advances in agricultural technology, as the support system was devised without the expectation of full production or production in balance with demand. Ministers tend to talk as though budget reform is already complete and we can gallop off into the sunset, no doubt smoking a full-strength cigarette, happy that it is all over, but that is far from the truth.
Alliance Members regard four elements as essential to the integrated package referred to by the right hon Member for South Down (Mr. Powell), who was right to stress that all these things affect one another.
First, there is still no real movement towards linking the contributions of member states with the wealth of those member states in an institutionalised way, related to GNP or whatever. Until that is achieved, there will be continuing objections from various countries.
Secondly, we are still a long way from reform of the CAP. We have made some hesitant attempts with the dairy industry, but we shall shortly have to do something about cereals if President Reagan changes the agriculture policy pursued for some time in the United States. If instead of paying farmers not to produce grain he takes away the payment and they produce the grain, there will be enormous problems for the common agricultural policy because the United States will be producing grain far more cheaply than we do.
Thirdly, there is a need for growth in common policies, especially in relation to new technology. The hon. Member for Cynon Valley (Mrs. Clwyd) referred to ESPRIT. Europe must be able to compete in this area. In addition, there is the question of the regional and social funds.
Fourthly, all those things mean higher own resources. There is no way around that. That, in turn, must be linked with budgetary discipline.
Those four elements constitute what I would regard as a sensible package. We must also accept that, unless we proceed sensibly and prudently in concert with the rest of the Community, the whole enterprise is bound to fail. We should remind ourselves much more often that we are not playing a game of the United Kingdom versus the rest of the Community. The hon. Member for Cynon Valley referred to the Mafia. Undoubtedly, they are a disreputable lot. The impression is vaguely given, however, that the

Germans, the French and indeed the Italians do not object to the Mafia. That is absolutely not true. All Governments object very much to frauds of the kind that have been discovered. If we do not appreciate that we are involved in a common enterprise, the enterprise cannot succeed.
My next point is in the form of a question. On the last occasion, I asked eight questions, none of which was answered either in the debate or afterwards by letter. I felt very neglected, but I am sure that the Minister replying to today's debate will take a more generous view. No budget has so far been fixed and the Germans are blocking this until Spain and Portugal enter the Community, which on the most optimistic time scale will not be earlier than June or July. Indeed, they may not get in at all. Mr. Andreas Papandreou may make sure of that. What then happens to the budget? If we have no more resources and no fixed budget, do we simply ask for a further £100 million or so?
A number of hon. Members have commented on the renewable loan.

Mr. Foulkes: Reimbursable.

Mr. Johnston: The right hon. Member for South Down seemed to think that it might be some kind of bequest, and. at the end of the day he may not be too far off the mark. If there is to be a reimbursable loan, future European Community budgets must take account of that fact. It is doubtful, even for the most optimistic pro-Europeans such as myself, whether the notional increase in own resources—some hon. Members do not like that idea, but it looks as though it will come off—will be enough to cover the current demands on the Community, quite apart from the hopes for the other aspects to which I have referred. That must cause us concern.
I was puzzled by the fact that the Economic Secretary, with an appearance of self-satisfaction, made a positive point about the fact that the European Parliament was excluded from any involvement in this exercise. There has been wild applause from certain well-known quarters for that statement. I do not believe that that exclusion is prudent. The Government's wish to bypass the European Parliament does not bode well for the evolution of better democratic procedures Europewide and is not in the spirit of Fontainebleau and the Prime Minister's commitment in the splendid paper the right hon. Lady submitted on that occasion.

Mr. Forth: There is a simple rationale behind this type of approach. Recent history has demonstrated that the European Parliament, in its capacity as the budgetary authority of the Community, is apparently capable only of moving the budget upwards. Every year it asks for more and more to be spent. It is simple logic to suggest that, if one is seriously in the business of controlling and curtailing Economic Community expenditure, the European Parliament should be excluded from that process as far as possible. I suggest that reason to the hon. Gentleman.

Mr. Johnston: I am grateful to the hon. Gentleman for making that suggestion. I point out, however, that the various directions in which the European Parliament has sought to increase the budget have all been aspects about which most hon. Members would agree.

Mr. Forth: No.

Mr. Johnston: Yes. In the main, the Parliament has sought to increase expenditure on the regional and social


funds, support for under-developed countries and the like. That type of expenditure has been opposed by national Governments, because those Governments have been committed to sustaining heavy expenditure on the CAP, which is another aspect that hon. Members simultaneously criticise. I hope — this is inevitable if the European Community is to continue — that the European Parliament will develop a more important role in the Community. That can be done only by national Governments giving the European Parliament more responsibility.

Mr. Beaumont-Dark: There is one born every minute.

Mr. Johnston: If that is so, we shall soon have a majority.
It is all very well for certain hon. Members—they do this frequently in such debates—almost to take a delight in the fact that there are weaknesses in and criticisms to be made of the Community. A flawed and malfunctioning Community is not to the benefit of this country—very much the opposite.

Mr. Anthony Beaumont-Dark: These Common Market debates show, if nothing else, a type of sick humour. We heard the hon. Member for Inverness, Nairn and Lochaber (Mr. Johnston) say that the way to cure the problems of the Common Market is to give it more power. That is like saying that the way to cure an alcoholic is to give him more whisky.
The problem with the Common Market is that it cannot and does not genuinely work. There is no doubt that the Government, in the shape of my right hon. Friend the Prime Minister and my hon. Friend the Economic Secretary to the Treasury, have worked hard and long to bring some sense into this senseless organisation. The Common Market cannot really work, because, as we show in our report, there are budgetary disciplines and regulations that are not mandatory. If they are not mandatory, each country does what it wants and agrees to abide by the rules as long as it suits that country's self-interest. The evidence we took has shown that.
As with this £119 million, we shall be asked year after year for more and more money. Most of us want to tell the Government, who are possibly the only sensible people in this incredible organisation, that a message should go out to the Common Market stating that the own resources increase nonsense is unlikely to be voted through by the House. Giving more and more money to Europe, as the hon. Member for Inverness, Nairn and Lochaber said, and giving more power to the European Parliament will mean only that the money will disappear and our means of putting our own structure and economy right will go to Europe and will be wasted there.
This very afternoon we have seen that £1·4 billion out of the £2·05 billion capital expenditure programme has gone towards supporting food surpluses. Over the years, we were promised that if we supported agricultural food prices for a generation — even before the Common Market was set up—those support prices would even out the bumps and dips giving an even price for food. Land is priced at £3,000 an acre—land prices hold the secret of the agricultural support business nonsense — not because that is a sensible price for the land that is used to grow food but because of the agricultural subsidies that can be absorbed by those who own that land.

Mr. Marlow: Is it not a truly remarkable achievement of the Community and the common agricultural policy that in the United Kingdom £1·4 billion of agriculture expenditure — three quarters of the Community's expenditure — is on agricultural surpluses while the United Kingdom produces only 17 per cent. of its own foodstuffs?

Mr. Beaumont-Dark: My hon. Friend is absolutely correct. What has happened to the price of land since some common sense was introduced into the milk quota system? The price of agricultural land has decreased by 15 per cent. If we had a more sensible common agricultural policy, a few landowners might scream but a few more sensible working farmers would be able to farm land at a worthwhile price. That would be better than subsidies going into the hands of landowners who add nothing to the value of that land, but simply build vast estates.

Mr. Geraint Howells: I have listened with interest to the hon. Gentleman. Does he suggest to hon. Members that the quota system for the dairy farmers is beneficial to us in the United Kingdom? Does he suggest that the Minister of Agriculture, Fisheries and Food and his Department should introduce quota systems for producers of other goods?

Mr. Beaumont-Dark: No, I do not. The one great problem with the milk system is that, as ever, the British people are the only ones playing the game. I made that point before. French farmers, who are meant to be reducing their production, are exporting more milk to this country at the expense of British farmers. If we had a sensible agriculture policy, if farmers did not believe that they could go on producing sugar beet we do not want, mountains of wheat we do not need, turnips no one wishes to eat and wine lakes of indescribably poor quality wine, and if people understood that food would be treated as other sections of our manufacturing and commercial life are, we would have better priced food, more prosperous manufacturers and a sensibly based Economic Community. The problem with the whole of the Community is that no Government—in Britain, France, Italy or Germany—have the courage to tackle possibly the greatest ever cartel in the world—the agriculture industry.
If manufacturing companies were allowed to produce cars that could be stored, and if every car produced by British Leyland had to be bought by the economy, what a wonderful, prosperous world the west midlands would be. But it is not sensible to produce cars that cannot be sold. Therefore, it is not sensible to produce food at 'exorbitant prices that we cannot afford.
If the Government are to do anything, they should—painful though it may be for some — get a genuine debate going about when the kissing in the agricultural world will stop. If we continue to encourage people to plough up fields and hedges to grow food that we do not want, more and more food will be produced, more and more subsidies will be required and more and more will the CAP destroy the rest of the basis of Europe.
Although I believe that the Government are doing the very best that they can, quite frankly we are having yet another battle which, although we have lost it with some dignity, we have nevertheless lost. The greatest battle of all will be about own resources and what we must do about


the CAP. There has been a great deal of talk and the Government have rightly slapped many wrists and kicked a number of bottoms. However, we still go on and on paying out money. That must end some time. If it does not, we shall keep on tearing ourselves apart in our own internal budget by knocking £10 million off that expenditure, £20 off expenditure on students or whatever and £50 million off the NHS. Where will the money go? It will be wasted. The time for reality is now.
This debate, although it has continued for longer than some wished, is one of the most important debates that we shall have. I hope that it will set the tone for the Government but, above all, I hope that it will set the tone for Europe. It must be realised that Britain will not allow this expenditure to continue. The British people and the British Parliament will not allow that.

Mr. Nigel Spearing: Many hon. Members will agree with the forceful and colourful argument put forward by the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark). I certainly agree with him. However, the debate is more important than even he and other hon. Members have realised. We are being asked to approve a Supplementary Estimate of £119 million which goes towards no less than £1 billion additional EEC expenditure for 1984.
This is an important constitutional debate because we are debating the fundamental power of the House—the power of the Legislature over the Executive, whether that Executive be in Brussels or in Whitehall. The difference between this debate and other debates on the EEC is whether we have theoretical or actual teeth in answering the question. The House must authorise the additional expenditure, and we are being asked to do so in a manner that has never happened in the House since we joined the EEC more than 10 years ago.
The delicate mechanism of financial control—both of taxation and of expenditure—which is found within the procedures of the House has now become enmeshed with the inordinate complexity of the financial, political and constitutional procedures of the EEC. I shall try to clarify this matter, not only for those present but for the record, and I do not intend to be brief. I shall quote a number of EEC instruments that pertain to this matter.
We are today involved in a procedure of financial precedent, which is also of constitutional precedent. It was right that the business motion that was tabled earlier was not passed so that the matter could be adequately aired. That throws into light the difficulty with the Consolidated Fund Bill which is set down for Wednesday. It will go through on the nod and there will not be the customary period for debate. We must note that.
The obligation of the House on finance for the EEC is contained in the European Communities Act 1972, section 2(3), which states:
There shall be charged on and issued out of the Consolidated Fund or, if so determined by the Treasury, the National Loans Fund the amounts required to meet any Community obligation.
The proposal is not a Community obligation. If it were, it would be covered by the Act and there would be no need for a debate, an Estimate and a vote. That is why we are under only a claimed obligation.
Following questions asked by some Conservative Members, and especially the hon. Member for

Nottingham, East (Mr. Knowles), what is the nature of the Community obligation? The answer is that there is no obligation. I have yet to see any statutory basis in European Community terms for the request now being made. As I shall seek to demonstrate, I believe that the payment to the EEC, for the supplementary benefit of the EEC, has no basis and is, therefore, illegal.
It is true that the intergovernmental agreement, Cmnd. 9395, into which the Government have entered and which, in effect, the debate endorses, is under no such limitation because it is an agreement outside the terms of the treaty of Rome, outside the statutory form or constitution of the EEC, and, therefore, it is perfectly proper for members of the club to say that they will make a voluntary loan to the organisation.
The point is that the organisation, by its own rules, has no power to spend more than the legal maximum and that legal maximum would be exceeded if supplementary benefit No. 1 is implemented by the expenditure of money that we are now discussing. Therefore, we must ask ourselves two questions. Is the Supplementary Estimate within the scope of the European Communities Act, sections 1(3) or 2(3)? The answer, quite clearly, is that it is not. If it fell within section 2(3), we would not be debating it; and if it fell within section 1(3) we would be debating not a Supplementary Estimate but a draft Order in Council. The Government, for reasons that have been given, decided not to take that path.
This whole question was foreseen as long ago as 14 March 1972, both in the Chamber and in Committee, during the passage of the European Communities Act. The right hon. Member for South Down (Mr. Powell)—then the right hon. Member for Wolverhampton, South-West — picked immediately on the word "ancillary". He asked whether a treaty such as the intergovernmental agreement before us was ancillary to the treaty of Rome. The debate raged for some hours.
My former colleague Mr. Douglas Jay, then the right hon. Member for Battersea, South, said:
If I understood aright, the Solicitor-General said it was quite clear that a treaty under subsection (3) must be within the scope of the Community treaties.
The Solicitor-General said:
It is on that ground that the vires of an Order in Council could be challenged if it sought to give the status of a Community treaty to something which could not and should not be regarded as a Community treaty 'as herein defined'." — [Official Report, 14 March 1972: Vol. 833, c. 350.]
That is exactly what happened. I might say now, "Enter Mr. Smedley." It was Mr. Smedley who, as a citizen exercising his judicial rights, sought a judicial declaration in the courts that the draft statutory instrument was illegal because it had no vires.
I do not intend to discuss the judgment of the three learned judges, including the Master of the Rolls. Despite the fact that the order has been withdrawn, I understand that there may he further applications and petitions. Therefore, the judgment is still sub judice. However, I hope I can correct the statement by the Economic Secretary to the Treasury—that the court has said that this procedure is lawful. It may have done so. Although the court quite clearly said that the treaty is capable of being regarded as a Community treaty, it did not say that it was a Community treaty. The judgment of the court was that that decision must be partly for the court and partly for the House. We are not discussing that order. Therefore, I shall not discuss its vires. We are discussing the vires of


the order that is before the House. It rests upon the constitution of the Community in so far as it relates to Community finance.
In his application, Mr. Smedley asked how the order could be legal because the treaty of Rome did not permit expenditure to be incurred over the so-called 1 per cent. limit. Therefore, he said that the order and the supplementary budget were illegal. In trying to satisfy the Select Committee on Statutory Instruments, which has an interest in this matter, the Treasury, in a statement that is contained in House of Commons Memorandum No. 25, VI, stated:
The undertaking of 2–3 October does not qualify under the first head since none of the Communities was a party; it is however a treaty to which the United Kingdom is a party and which is ancillary to the EEC treaty and to the Own Resources Decision of 21 April 1970 and also to the ECSC, Euratom and Merger Treaties. All of these are Community Treaties within the meaning of the 1972 Act.
I believe that they are, but the question to which the Treasury memorandum did not address itself was whether those treaties are capable of allowing agreement to the expenditure to be given. I suggest that the memorandum placed before the Select Committee on Statutory Instruments was at best partial and at worst misleading.
It is at this point that I need to go into the history of the affair. Without doing so, I cannot demonstrate to the House the inadequacies that have so far transpired. The Treasury memorandum from which I have just quoted referred to the very important EEC decision of 21 April 1970 which initiated the own resources mechanism under which we now work. Article 1 clearly states that the Communities have to ensure that their budget is in balance. Article 4 states:
From 1 January 1975 the budget of the Communities shall, irrespective of other revenue, be financed entirely from the Communities' own resources. Such resources shall include those referred to in Article 2 and also those accruing from the value added tax and obtained by applying a rate not exceeding 1 per cent. to an assessment basis which is determined in a uniform manner for Member States according to Community rules.
That is the basic statute relating to what the Community can do. It made it clear beyond peradventure that not only had the income and expenditure to balance, but that the expenditure must not go above 1 per cent. That was the initial decision.
However, it became something very much more than that. It became entrenched in Community statutes by virtue of the accession of the United Kingdom, Denmark and Eire to the Communities. A little known but vital article in the treaty of Accession, article 131, which is to be found in Cmnd. 7463, made it quite clear that at the time of ratification of the United Kingdom treaty of Accession to the European Communities the means of raising revenue was entrenched in treaty form. For the record, article 131 provides:
From 1 January 1978, the Communities' own resources and, where appropriate, the financial contributions referred to in Articles 4(2), (3) and (4) of the Decision of 21 April 1970, shall be due from the new Member States, in full, subject to the following provisions.
Those provisions do not now apply. Therefore, it was made clear from the very start that the 1 per cent. was clearly enshrined in Community law, as was the obligation to balance its books.
That was the position until last autumn when the Community found itself short of funds for 1984. It could have clone one of two things. First, it could have stopped the payments in the current year and made the payments

due in 1984 from the 1985 budget. That would have meant a delay in payment. Perhaps farmers would have been paid later. However, the Community did not do that. Secondly, the Community could have said that it must meet its obligatory payments, but that perhaps it was not absolutely necessary to meet its non-obligatory payments. However, the letter of Mr. Andriesson to member states —communication 8514 of 1984—made it abundantly clear in paragraph 7 that the Community had no intention whatsoever of trimming its non-obligatory expenditure, because, to use its words, this would advocate an upheaval of those policies which are financed by non-obligatory expenditure and the Commission would not in any circumstances propose transfers of expenditure which would have that effect. In other words, there were three ways in which the Community could have reduced the expenditure. It took none of them. Instead, the Community requested member states to promulgate the undertaking, Cmnd. 9395 — and to lend to it the £1,000 million that we are debating tonight.
The Select Committee on European Legislation is not responsible for the Estimate that we are debating. However, it looked at the promotion of the draft supplementary budget. Although it may have been legal for Members of the European Parliament to promote that international agreement, I question whether it was legal for the EEC to promote a preliminary draft supplementary budget to allow it to spend money which it had not got. It would be spending money to which it had no legal right. The Scrutiny Committee —House of Commons 1978, XXXV—in a paragraph describing that supplementary budget, said:
The Committee note that this action based on an intergovernmental agreement outside the terms of the Treaty was taken by the Representatives of all the Governments of Member States meeting within the Council.
The Committee then goes on to point out that it had originally wanted to deal with the matter through article 235, but thought that that would not be a proper way of doing so. I hope that that makes it clear to those Conservative Members who have been slightly mystified that the supplementary budget has no basis whatever in EEC law. If it has no basis in EEC law, whether in the treaty of Rome or any other treaty, have the Government any real basis on which to present their Supplementary Estimate to the House?
I am sorry to see that the Government, in paragraph 8 of the memorandum which they presented with the Supplementary Estimate, make no reference to the matter being extra-treaty at all. Under paragraph 8 — policy implications — they just state that it arose out of Fontainebleau and make no mention of the draft supplementary amending budget. It is, therefore, an improper arrangement and one to which the House should not give its assent.
The control and reform of excessive expenditure has, historically, been the concern of the House and is the only way in which it has final power over the Executive. Therefore, the vote on which we shall embark tonight is one of those rare occasions when the House can, if it chooses, exercise control over the Executive of the day. In that respect, it is a new and unprecedented situation. It is ironic in many ways because, as many hon. Members have said, the profligate and uncontrolled expenditure of Europe is in stark contrast to the unjust parsimony of the


Government's expenditure inside the United Kingdom. Therefore, I suggest that there is ample cause for complaint.
But one further irony remains of which the House is not yet aware. The judicial procedures, of which I have just spoken, are still in train. I understand that Mr. Smedley has submitted a petition to the House of Lords. In that petition he claims, as I understand was his case in the court, that there is no statutory basis for this payment at all. Article 177 of the treaty of Rome, as has been said, is a matter of preliminary ruling. It deals with the powers of the European Court over the courts of nation states.
Let me remind Conservative Members — some of whom are only too well aware but others, I regret, members of the Treasury Bench, are only too unaware — that when the House passed the European Communities Act the other place was no longer the highest judicial court in the land. Through a vote in this place, we passed the powers of judicial determination of the other place in its judicial capacity to the European Court. Article 177, which speaks about matters of interpretation of the treaty or interpretation of its statutes, says:
Where such a question is raised before any court or tribunal of a Member State, that court or tribunal may, if it considers that a decision on the question is necessary to enable it to give judgment, request the Court of Justice to give a ruling thereon. Where any such question is raised in a case pending"—
I presume that that includes a petition—
before a court or tribunal of a Member State, against whose decisions there is no judicial remedy under national law, that court or tribunal shall bring the matter before the Court of Justice.
As I understand it, that clearly refers to the House of Lords. There is no appeal from the House of Lords, and the terms of the article say that there is a case pending. I should have thought that, under Community law, there was an obligation on their Lordships' judicial branch to refer that to the European Court. In view of the rather lengthy and, I admit, boring but necessary quotations that I have given to the House, I cannot see how the European Court could rule otherwise than that supplementary budget No. 1 is extra-treaty, ultra vires and, therefore, illegal.
I do not know whether the other place has taken such steps. Knowing the European Court, I cannot guarantee that it would come to that conclusion, but, in the circumstances, it would be difficult not to do so. Even if it does not, and even if the Government win the vote tonight, the Smedley case has brought a new insight into and advanced the ancient argument of the rights of the Legislature against the Executive that much further. Without the Smedley case we should have had an hour and a half to debate what we have been discussing tonight. Without that gentleman having petitioned the House of Lords, the test to which I have just referred would not necessarily be in question, and perhaps the power that the House has already voted away would not become so well known as I hope it will.
The House and the country owe a debt to that gentleman because he has done what people have done over the centuries — used their democratic individual rights as citizens to seek redress in the courts and to contribute to the strength of the House in its control over the Executive of the day. That is the basis not only of individual freedom but of democracy as we understand it.

Mr. Nicholas Budgen: In substance, Mr. Smedley triumphed, and it is to him that we owe this debate. But technically, Mr. Smedley lost, and I understand that the Government intend to have their costs from Mr. Smedley. I hope that there may be some expression from the House that, although the Government have a legal right to those costs, it would be the most disgraceful and ungenerous attitude to enforce that order against Mr. Smedley.
The hon. Member for Newham, South (Mr. Spearing) spoke of his part in 1973. We are all prisoners of our memories on this issue. I always speak with great embarrassment on the EEC when I speak either after or in the presence of the right hon. Member for South Down (Mr. Powell). I remember that when, 11 years ago, I went before the Conservative Association at Wolverhampton, South-West, shattered as it was by the knowledge that its sitting Member was not prepared to take part in what he described as a fraudulent election, I said that if we remained in the EEC we would reform the common agricultural policy. In the constituency which was represented for 63 years by C. P. Villiers, the man who year after year moved the abolition of the Corn Laws, it is difficult to advocate the continuance of the common agricultural policy. I genuinely believed, in my youth and naivety, that if we remained in the EEC the common agricultural policy would be reformed.
But we must understand that, if the House supports the Fontainebleau agreement, it is probably goodbye for ever to reforming the common agricultural policy. Let us look for a moment at what the Fontainebleau agreement provides. First, it provides that until the increase to 1·4 per cent. comes along, we shall provide supplementary money for 1984 and for 1985. In 1986 it is assumed that the national Parliaments will agree to the increase to 1·4 per cent., but it is worse than that. In clause 2 of the Fontainebleau agreement, a moral commitment is given to increase own resources to 1·6 per cent. by 1 January 1988. I fear that my naive promise to the people of Wolverhampton in 1974 that the CAP would soon be reformed will not be honoured in 1988, nor even in 1994.
We must ask ourselves whether any of the nation states —in that I include the Government and people of this country—genuinely want the CAP to be reformed. Are we doing the easiest thing in politics, that is, are we merely talking about wishing to see it reformed and not being prepared to will the detailed means for it? Our position is clear. We have a veto on this increase or loan. We have a veto as a nation and as a House on any increase in 1985, and we have similar vetos upon the 1·4 per cent. and 1·6 per cent. increases.
The fact is that the Government know that, if we follow the Fontainebleau path, expenditure on the CAP will continue to escalate. If the House does not believe that, pray have a look at today's public expenditure White Paper. Previously, the Tory Benches were filled with those who were deeply angry on behalf of their richer constituents who were to have to pay the massive sum of £39 million towards the education of the richer, more privileged university undergraduates and students.
On page 13, volume I, of "The Government's Expenditure Plans 1985–86 to 1987–88" there is a chart of areas where expenditure over and above last year's White Paper is planned for next year. In 1985 net payments to


EC institutions will increase by £200 million, and there will be an increase of payments to agriculture of £130 million. I must remind my constituents who were so angry that that amounts to £330 million, which is about 10 times as much as the increase in the cost of their students' education about which they were complaining — understandably because they had not been warned.

Mr. Deakins: Does the hon. Gentleman agree that to £130 million extra for agriculture is United Kingdom expenditure on agriculture, and that it is in addition to any increases that will come from the largesse of the Community?

Mr. Budgen: That is not quite right. I was about to deal with that. Technically it is British expenditure, but as a preliminary to EC expenditure. If the hon. Gentleman looks at page 54 of "The Government's Expenditure Plans 1985–86 to 1987–88", volume II, he will see that a further £190 million and £30 million are going to the intervention boards, which are technically under the control of national expenditure, but which, when the produce is sold, are taken over by the EC.
On page 48 it is plain that an extra £200 million is budgeted to be spent in 1985. I refer to paragraph 50, laughingly described as "Budget discipline", which shows that a second Supplementary Estimate will be brought before the House to provide for a further £200 million in 1985.
The House has a veto, and should stop this escalation. Otherwise the promise that I gave to those who became my constituents in Wolverhampton, South-West that the CAP would be reformed will be as nothing. It will be a fraud upon the people of the United Kingdom. Indeed, there can be only one honourable reason for voting for the measure. It would not be that budgetary discipline is effective—my hon. Friend the Member for Kettering (Mr. Freeman) nods in agreement, albeit from a different standpoint—but that the system of budget discipline is entirely dependent on the will of the nation states. If they wish to obey or avoid it, it is technically perfectly possible for them to do so.
Are there any signs within the nation states that they have a deep-seated political will to reform the CAP? Of course there is not. The French Minister of Agriculture first sounded deeply angered because he feared that there might be a system of budgetary control that was effective, and then, when he saw the loopholes, he thought that it was splendid and that everything could carry on as before. Recently, we heard that the Germans had decided no longer to collect the milk levy because they had found that they were the only nation in the EC to collect it. Moreover, the Germans say that they do not think much of the idea of reducing cereal prices this year by 5 per cent. There is no evidence in the EC of any fundamental deep-seated political desire to reform the CAP.
Let us be clear about this. If the House throws away the veto either tonight or on subsequent votes upon the escalation of our contributions to the EC, it will not be possible for hon. Members like me to go before their electorate and again say that the CAP will be reformed because we shall have made it impossible to reform the CAP. What is more, in future it will not be possible for us to say, "It is the fault of all the other nations in the EC". By our vote tonight we take within our hands the power

to prevent such escalation. If we throw it away, it will not lie within our mouths to blame other nations for our neglect.

Mr. Eric Deakins: I shall not detain the House long, because it may wish to move to other business. I congratulate the right hon. Members for Worthing (Mr. Higgins) and for South Down (Mr. Powell) on drawing the attention of all hon. Members to the nature of what the House is being asked to agree.
It is an extremely important matter. Many doubts remain and many questions that have been asked need to be repeated to the Treasury Bench. I am glad that the Chief Secretary to the Treasury is present although, as the right hon. Member for South Down said earlier, it would have been even better if we had managed to ensure the attendance of the Chancellor of the Exchequer, if only for the reply.
One of the main questions has been whether the sum is a loan or a repayable advance. We have heard of the semantic difference between the two. In his evidence to the Treasury and Civil Service Select Committee last year, the Minister tried to draw a distinction. If it is not a loan, is it a repayable advance? If it were a loan, it would be repaid with interest. If it is a repayable advance, will it be repaid with interest? The motion does not say when the money will be repaid to Britain. What will happen if that loan or repayable advance of about £120 million is not repaid? Obviously, it will be a political matter, but what power would we have under the Community's laws to insist on the return of our money? Whatever the sum is called, it must be the Government's intention to get it back at some point. How can we ensure that that happens?
Several hon. Members have said that this is an unusual procedure. The terms of the motion could be applied to any supplementary estimate at any time, in respect not only of EC expenditure but of domestic expenditure. Is it not unusual for the Government to act in this way? Will the Minister reassure the House that this will not constitute a precedent for other supplementary estimates relating to public expenditure in the United Kingdom?
I join the hon. Member for Wolverhampton, South-West (Mr. Budgen) in criticising the common agricultural policy. I shall not waste the House's time by mentioning the many debates that we have had and the many serious criticisms of that policy. Ministers, especially the Prime Minister, have made much of the document on budget discipline. Some people have said that it is not worth the paper on which it is written, but that is a little harsh on the agreement. Much work has gone into it, but in practice it will not have much impact. Last year, I asked the Prime Minister why the agreement had not been embodied in a financial regulation, and it was clear from her reply that she would have preferred that to happen. However, she had to say that we could not get our way. Why could we not get our way? What must have happened was that the other member Governments, represented at the highest level when these matters were debated last year, did not wish the noose of financial control to be tied too tightly around the neck of the CAP. I apologise for mixing metaphors, but perhaps they decided that it would be better to have the CAP on a looser rein.
Why do the CAP agreement and the budget discipline give farmers in the Community almost everything that they wanted? The Government have not obtained an agreement


to restrict agricultural expenditure; the agreement will automatically increase such expenditure year after year. No one in his right mind would say that the Community's own resources will diminish.
Under the agreement on budget discipline, there is no longer an incentive for reform, fundamental or otherwise, of the CAP. As long as CAP expenditure can be kept within the limits of the increase in own resources—it would go from 5 per cent. to 10 per cent. a year under the agreement—expenditure on agriculture will be able to grow by that amount. Who can doubt that it will grow by the maximum amount permissible, and perhaps even by more?
Would we accept the principle of allowing expenditure under one vote heading to increase by the amount of a revenue that was appropriated for that expenditure in respect of public expenditure in the United Kingdom? Would we say that expenditure on defence, education or any other major public service will be allowed to grow from now on, regardless of the opinion of the House, which is supposed to control expenditure, following an automatic increase in income tax arising from inflation in any year? That is an absurd principle which the Treasury would throw out of court immediately, yet the Treasury and the Prime Minister have accepted it in respect of EC expenditure.
Many hon. Members who spoke in this and previous debates have not yet grasped the point about the increase in own resources to 1·4 per cent., which we shall soon be asked to approve, then to 1·6 per cent., and no doubt to more if we remain in the Common Market. When the VAT expenditure ceiling is increased from 1 per cent. to 1·4 per cent., there will be a substantial increase in the own resources of the EC in that year. Therefore, it will be possible under the agreement on budget discipline for expenditure on agriculture to grow by 20 per cent., 30 per cent. or 40 per cent. in a year. That must be insupportable.
My hon. Friend the Member for Newham, (Mr. Spearing) dealt in great detail with the status of the intergovernmental agreement. Where is the authority for what we are debating tonight and being asked to approve in the treaty of Accession, which ties the House and the people of Britain to the legislative and financial procedures of the EC? There is no such authority, and there must be at least some doubt whether what we are being asked to approve is ultra vires.
We must control Community expenditure. Some would argue that we should increase the powers of the European Assembly. The hon. Member for Inverness, Nairn and Lochaber (Mr. Johnston), who is an admitted federalist—there are fewer and fewer of them in the House as time goes on, although there are still a few left in government — wants the European Assembly to have increased powers. We must resist that at all costs, and the way to do so is to ensure that at least this Parliament pays much closer attention to controlling our proportion of EC revenues as one means of securing effective financial control over all EC expenditure.
I should like to think that debates similar to this one are being conducted in the Parliaments of the other nine member states. I should like to think that questions are being asked of their Ministers, that they are discussing strict financial procedures and raising points because of what they are being asked to do. I hope that that is

happening, but—I do not wish to appear too cynical—I am under no illusions, knowing what happens in some Parliaments, that it is. They are not as interested in financial control and inquiries into such matters as we are. That is a defect from which Britain suffers in the EC. It is a case not just of our playing by the rules and other countries not—it would be unfair to mention names—but of Britain taking its membership seriously while others accept what comes along. They do not have the same parliamentary interest in controlling what is happening in the EC as we do. Therefore, I beg the House to reject the motion, because it will set an undesirable precedent.

Mr. Tony Marlow: May I say at the outset that I sympathise with the Government, who are in a difficult position. On all these issues they have worked manfully and heroically, and they have achieved more than any other collection of Ministers could have achieved. They have done us proud. I sympathise especially with my hon. Friend the Minister of State, Foreign and Commonwealth Office—the hon. Member for Edinburgh, Pentlands (Mr. Rifkind)—who will be replying to the debate. He is one of my favourite Ministers, and my comments will apply especially to him.
Those of us who are friends of Europe and know how the Community works must be concerned about what has been happening. The Commission—the ultimate antidemocratic quango—with its own vested interests and values, proposes Community policy. The Council of Ministers, which includes a representative of the United Kingdom and nine other countries—with its own vested interests and values—discusses, processes and eventually spews out many bastardised compromises. Some of them are bad, some are very bad and some are not so bad, but few of them are good.
On the last occasion when we went through this process, a Conservative Government dedicated to the market were forced to impose on our farmers a system of rationing through milk quotas. A Government who thought that the best way of dealing with the problem was through price had to deal with it through a system of rationing.
On this issue, I am afraid that Her Majesty's Government have little power. They are the victims of the unenviable position that has been presented to them by the processes indulged in by my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath). There is little the Government can do, but that does not mean that Parliament must do nothing. This is a matter of Supply — of cash, of taxation, of money. This House is entrusted with responsibility for the people's money. We can take issue on this measure, even though the Government, through no fault of their own, cannot.
Perhaps I may be so bold as to distil the views of the House on Europe by saying that there are those who are fundamental opponents and would still like us to get out, and there are those, such as the hon. Member for Inverness, Nairn and Lochaber (Mr. Johnston), who are Euro-fanatics and would like us to be involved in a federal Europe.
However, I suggest that the view of the House as a whole is that we are in, will stay in and should make the best of it and work and trade with the countries of Europe. I wonder whether, at the same time, we wish Europe to be a large spender of money. Do we want Europe to have


the funds to indulge in expensive policies? Do we want a continuation of common agricultural policies? We want to co-operate with Europe in those areas where we have interests in common, but we do not want it to be a financial burden round our necks.

Mr. J. Enoch Powell: There is another category, which the hon. Gentleman has omitted. I refer to right hon. and hon. Members who are determined to recover to this Parliament its powers of control over law, money and jurisdiction but who wish to see, subject to that, the widest possible co-operation with neighbouring nations on the continent.

Mr. Marlow: I respect the point that the right hon. Gentleman makes and I am sure that many people, if they search their minds and consciences on this issue, will agree with him.
Before we vote on this matter, hon. Members should ask themselves three questions. If they say yes in answer to one of them, they should support this expenditure. If they say no to all three, they should oppose what is being suggested.
First, we are talking about £120 million of taxpayers' money. If we have that amount to spend, is this the best way to spend it? My right hon. Friend the Member for Worthing (Mr. Higgins), in a brilliant speech, dealt with that point. We in this country have been going through a process of agony—as my right hon. Friend said, dealing with candle ends—in respect of expenditure on overseas aid, parental contributions, cutting £20 million here and £150,000 there to try to make the budget balance. The Government are, rightly, concerned with public expenditure. Should we be spending £120 million of our people's money in this way?
How will that money, if we agree to spend it, be supervised? Can we be sure that it will be well spent? Or will it be wasted? We heard the ghastly story last week of a fraud by which the Mafia took £30 million of Community funds. Should we be considering increasing the amount we allow for Community stewardship when stories such as that are regularly coming through?
The consciences of hon. Members were touched when we debated cutting heating allowances. The sum involved in this Estimate would provide £1 a week throughout the winter for every home with a pensioner. Should we spend the money that way or should it be used to top up a budget that has run wild?
Many of my hon. Friends have spoken of the need to spend money on Britain's infrastructure. It is their right to call for such expenditure, but they cannot have their infrastructure and eat it; we cannot spend the same money twice. If we spend £120 million making up an overrun in the European budget, we cannot spend it on the infrastructure as well.
Secondly, will this money be spent in the interests of the United Kingdom? I understand that we shall get some of the £120 million back in agricultural support, though nobody has said how much. We can be sure, however, that there will be an increase in the net contribution of the United Kingdom to the Community as a result of this action.
We in Britain have been fighting like mad to control Community expenditure. We have had a limit put on our net contribution. As a result of this device, that limit will be overcome and our net contribution will increase.
We are concerned about our farmers because we want a prosperous and profitable agriculture industry. This year the arable farmers have had the uncovenanted blessing of 4 million tonnes of grain which they did not anticipate getting, and that has been worth £500 million to them. It has been as manna from heaven, money they were not expecting. Must we provide them with an extra £100 million from Community funds out of the pockets of United Kingdom taxpayers?

Mr. Richard Body: Does my hon. Friend agree that the large scale arable farmers have been having a bonanza while the small livestock farmers might be called an endangered species?

Mr. Marlow: My hon. Friend, as always on these matters, is right. There has for long been the question of horn versus corn. Since we have been in the Community, corn has prospered and horn has been downtrodden.
The latest advisory brief to be presented to the European Legislation Select Committee is entitled, "The Budget Transfer No. 21/1984." It explains how money is transferred from one part of the Community budget to another. It explains how 270 million ecu have been transferred out of the cereals budget in terms of intervention and public storage costs and how 240 million ecu have been transferred to the distillation of wine. We grow cereals but we produce little wine. Thus, money has been taken from a part of the budget that benefits the United Kingdom and put into a part that does not benefit us. If that had not happened, this £120 million from the United Kingdom would not have been needed. In other words, having been had once, we are being had yet again.
Thirdly many hon. Members are concerned for the EEC and its institutions and want the Common Market to succeed. If we vote this money tonight, will it actually benefit the EEC? In his opening speech, my hon. Friend talked about unavoidable expenditure. There was a little debate between us, by way of interventions. It was suggested to him that if the price rises under the common agricultural policy had not been so great, we would not have had this unavoidable expenditure. If we agree tonight to spend more money, next year, surely, like this year, there will be more unavoidable expenditure. People will have learnt that the House of Commons is always prepared to dish out more cash to cover price increases that should not have been agreed in the first place.

Mr. Phillip Oppenheim: I do not disagree with much of my hon. Friend's thesis, but I believe that his contention that price rises are the problem is false. Over the past 10 years or so, general prices have risen three and a half times whereas prices received at the farm gate have risen only two and a half times. It is not price rises that are the problem so much as the increases in production caused by technological developments. In real terms, prices have fallen.

Mr. Marlow: My hon. Friend has a point. There is a mixture of factors. If price rises had not been so great, some of the product would not have been produced, there would not have been the storage costs, and the cost to the CAP would not have been so great, and we would not have had to have this sad debate.
Are the interests of the Community served by our agreeing to the payment of this money? We are told that it is a reimbursable advance, not a loan. When is a loan


not a reimbursable advance, and when is a reimbursable advance not a loan? As my right hon. Friend the Member for Worthing has said, that is a question of semantics. I understand that the advance is due to be repaid in eight tranches, beginning, I believe, next July. No interest is payable on it. Perhaps that is the answer to the question. Perhaps the difference between a loan and a reimbursable advance is that one pays interest on one but not on the other. I can see no other difference. When the time comes for the reimbursable advance to be repaid, it will not be repaid. There will be another reimbursable advance to pay for it. The system is quite straightforward. It is easy to understand.
The Government say that, before they agreed to this measure, there was to be a very important condition precedent. It was that the Community should instil financial disciplines. We have heard about the financial disciplines. We have heard how the framework can be changed by majority voting. We have heard how certain things can be voted through in exceptional circumstances. Many hon. Members believe that exceptional circumstances always apply in the Community. We therefore believe that there will be no financial discipline.
I appreciate the problems and the difficulties of the Government. However, in the end, one has to ask oneself, "If we vote for this increase in funds for the Community tonight, is it more or less likely that there will be financial discipline?" I believe that if we vote against the payment of the money, what we want and what the Government want—proper, prudent, efficient financial management in the Community—will come about, whereas if we let the money go through we can say goodbye to it.

Mr. Teddy Taylor: Irrespective of our views on the motion, we should all be grateful to Mr. Oliver Smedley. Had it not been for his initiative, we would probably have discussed the order for one and a half hours, beginning at 10.30 or 11 pm. It is appropriate that we should have more time to debate it because—as has been said time and again — this is a matter of constitutional significance.
Treasury Ministers constantly try to find ways to avoid paying out money. That being so, the present situation is astonishing. Treasury Ministers seem to be looking for any possible device, legal or otherwise, to pay this money over as quickly as possible.
My hon. Friend the Member for Northampton, North (Mr. Marlow) asked what the difference was between a loan and a reimbursable advance. There is a very important difference. My right hon. Friend the Prime Minister herself, speaking in the House, has said that a loan would be illegal under the terms of the treaty of Rome. She said that, within the EEC,
it is not right to raise loans for budgetary purposes".—[Official Report, 27 June 1984; Vol. 62, c. 1003.]
The only effective difference between a reimbursable advance and a loan is that, as the Prime Minister has said, a loan would be illegal.
The Government are well aware that we have stretched the law significantly to make this payment, but, even if it were claimed that we had not stretched the law, we would have certainly stretched parliamentary precedent. No one knows under which law the payment is authorised. I

believe that my hon. Friend the Minister is well aware that there is no law that justifies the payment. The Government have decided that, in the absence of a law to justify the payment, there must be a Supplementary Estimate.
Throughout the history of the House of Commons, it has been only in genuine emergencies that Governments have resorted to Supplementary Estimates without legal backing. There is no emergency here. We have all known for over a year that some such situation would arise. We are therefore creating a major precedent, and I think that that should worry us.
We have an opportunity today to decide whether or not to give an extra £119 million to the EEC. We have no statutory obligation to do so. Do we wish to give even more money to the EEC?
The House of Commons often talks in terms of millions or billions of pounds. We should remember that £119 million is a lot of money. It could provide 6 million pensioners who receive heating allowances with an extra £20 each to help with fuel bills. It could be used to give the family of every unemployed man an extra £40 to help with expenses. The Government are telling the EEC, "If you spend more money, we will foot the bill." Can that be squared with their other policies?
Southend borough council is one of the most prudent local authorities in Britain. About three months ago, when its money began to run out, it stopped paying improvement grants. I am sure that many local authorities could tell the same story. When the money began to run out and they drew close to the limit set or advised by the Government, they decided to stop essential spending.
Southend health authority is under-funded within the region. Because it is reaching the limit set by the Government, the health authority is obliged to consider whether to close hospital wards.
I entirely accept that, in the national interest, we should control public expenditure. If Departments overspend, we must tell them to stop. If local authorities or health authorities overspend, we must tell them to stop. Horrible choices have to be made and essential services curtailed. As Conservatives—supporters of the Government—we can bear the situation so long as there is consistency. But how can I tell my health authority to close wards, tell Southend council to stop paying improvement grants, or tell Government Departments to stop providing essential services if the Government are telling the Common Market at the same time that if it spends more money they will pass a special resolution in the House of Commons?
What can I tell Southend health authority or the local council about how the EEC is to spend the money? We heard the other day that some £14 million had been lost in the Community accounts. An article in this month's Accountancy Age shows that the accounts of the EEC are absolutely crazy. Money simply disappears and no one can account for it.
We are also well aware that substantial sums of money are being paid out to the Mafia for the produce of non-existent farms and for the destruction of non-existent tomatoes. That has gone on year after year and there is no incentive for anyone to do anything about it because Common Market funds are paid out by national Governments. Under existing procedures, nothing can be done about that except through special reports of that splendid body the Court of Auditors, which brings up such issues from time to time. Even if I tell the Southend health authority to forget about the money being paid to the Mafia


and the money that is lost, my hon. Friend the Minister knows that, under the Common Market's regular spending, the vast proportion of the cash goes simply on dumping food, Russia and Eastern Europe being among the major beneficiaries.
We know that about two thirds of Common Market spending goes on agriculture and that more than half of that goes on dumping, destroying or storing food surpluses. The quantities are not small. We sent the Soviet Union alone 157,000 tonnes of food every week last year, and at the most crazy prices. While we have to pay a substantial price for beef, we sell it to the Russians at 40p a pound. We sell them also sugar at 5p a pound and wine at the unbelievable price of 7p a litre. That is where the money is going. I suggest, with all due respect to the Government, that, although we appreciate that such Common Market nonsenses have gone on for years, it is appalling to present this type of measure to the House when almost every public authority in Britain is having to cut services because they are told to by the Government. They are told that there is no alternative but to budget and that that is in the national interest, even if it means cutting essential services. We cannot have two standards—one for the Common Market and another for ourselves.
In justification, the Government have said that things will be different, that if only we vote this extra money and support the increase in own resources, things will change and there will be tough budgetary discipline. Most of us have a great admiration for my hon. Friend the Economic Secretary to the Treasury but, no matter how much we try to kid ourselves, we know in our heart of hearts that the budgetary restraint mechanism is bogus. It is a load of rubbish and I do not believe that anyone has been taken in by it. Other members of the Common Market certainly have not. They know exactly what the score is. They are prepared to say anything to get the extra cash but, when it comes to operating the restraint, nothing happens.
We should examine what has been proposed for agriculture. This year, there has been horrendous overspending and the mountains have grown higher than ever before. The Common Market is planning under the Fontainebleau mechanism not a cut in expenditure but a further increase. Under the budgetary mechanism, even if it worked, agricultural spending for future years is to be based on actual spending in 1984 and 1985, plus a percentage to take account of the increase in the Common Market's own resources. Even if the scheme works, we are still to pour more and more money into surplus agriculture.
I can well understand the hon. Member for Cynon Valley (Mrs. Clwyd)—who popped in for a second, made a speech and popped out again—talking about the coal industry. She feels, rightly, aggrieved. If we have this arrangement for agriculture, why should we not do the same for coal? Why should we not keep all the pits open, guarantee a price three times higher than the present one, employ every miner and give him a guaranteed amount of money?
One of our problems in getting the Conservative party to adopt a sensible attitude towards the Common Market is the Labour party's opposition to it. I cannot understand why the Labour party has been against the Common Market. Surely it is the answer to a Socialist dream—lots of intervention, lots of subsidies, lots of guarantees and lots of social funds. If I were a Socialist I should be strongly in favour of the Common Market. If we get more little ladies like the hon. Member for Cynon Valley who

pop in, say that, as a Socialist, they like the Common Market, and then pop out again, it will become even more respectable for Conservatives to stand firm in opposition to it.

Mr. Marlow: The Commission, which is a bunch of bureaucrats, initiates policy. If a bunch of bureaucrats initiates policy, we get Socialist and interventionist policy.

Mr. Taylor: My hon. Friend is telling us what will happen, and it is very sad.
Even if I thought that there was some merit in the Government's proposals, we now have the only chance that we shall ever have of getting changes in the Common Market and the CAP. Sadly, I doubt whether the Government even want changes in the CAP. We hear about the changes that they would like and about reforms, but a structure setting out how agriculture might be changed is never put before the House. Promoting the reform of the CAP will involve substantial battles and some difficult decisions. It will be difficult to deal in a small way with agriculture, just as we are trying to do with Mr. Scargill and his hooligans in the coal industry.
If there were any merit in what the Government want to do and if they had some determination to do it, there might have been a minor move in regard to the scandal that upsets people in Selly Oak as much as people in Southend—the fact that agriculture is the only industry in Britain that does not pay rates. There was talk, for a very short time, of the Government doing something about that. After much pressure, my right hon. Friend the Prime Minister announced that the Government had decided not even to consider the problem.
If we accept the Supplementary Estimate and an increase in own resources, we shall throw away our only opportunity to get reforms in the EEC structure. If we throw away this opportunity we shall be condemned by the people of Britain and by future generations. I know many people who genuinely supported our membership of the EEC and who said that they knew that there was much wrong with it but that we should wait until we got a seat at the table and a chance to do something. They said that there would then be changes, but there have been none. We have had no reform because nothing can be done without unanimous agreement. When that prospect was abandoned, we were told that we should wait until the Common Market ran out of money, as we would then have a chance to do something. That time has now come. If we throw it away, we shall throw good money after bad and lose our only chance of achieving Common Market reform.
I am delighted to see my hon. Friend the Under-Secretary of State for Employment nodding. There is a great deal of quiet support on the Front Bench, but we never hear about it. Some day we must take our courage in our hands, even if it means offending a few cereal farmers. Reform will ultimately be in their best interests as well. We must take courage, stand firm and tell the Common Market, just as we tell the Southend borough council, the Southend health authority, the Department of Employment and others, that it must have a budget and keep to it and that it will not get one penny more unless it changes its spendthrift ways. That must be the House's message. I hope that that message will be approved by a majority.

Mr. Richard Body: Needless to say, I agree with every syllable that the House has heard from my hon. Friend the Member for Southend, East (Mr. Taylor). I am glad of the opportunity to pay tribute to Mr. Oliver Smedley, as we should not be debating this matter now if it were not for the legal proceedings that he instituted in the High Court, took to the Court of Appeal and now proposes to take to the House of Lords. I hope that he will not mind my saying, without getting too sentimental, that he is an old-age pensioner. He has only limited capital, but he has been ready to risk it all. I hope that he will be regarded as someone who has championed our liberties. Perhaps those who have to make the decision about costs will bear that in mind when the time comes.
We are here only because the cost of the CAP goes up year after year. I am saddened by the fact that this everlasting increase in the cost of the CAP is doing nothing for the good name of agriculture. As the cost of the CAP goes up, so the number of farmers goes down. When the CAP began, there were 20 million farmers in the Community, but the number has now fallen to 10 million. If people assert that the purpose of the CAP is to keep small and inefficient peasants on the land, or whatever phrase they may choose, that is a gross mistake. The profits are being garnered by those who have the largest number of acres. In our country, every year since the CAP began, some 3,000 to 4,000 farmers have left the land. That is 3,000 to 4,000 more families who are no longer supported by agriculture. That is true of the Common Market as well.
My hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) spoke admirably, and I apologise if I interrupted him with so many "Hear, hears". He was right to identify where the money is going. It is supporting not farmers, but landowners. One can relate the amount of price support money to the inflation of land values. Since we began the system of price support, about £64,000 million of public money has allegedly gone towards agriculture. However, land values have gone up in real terms by almost exactly the same amount. What has happened in the United Kingdom has been matched throughout the Community.
We are not supporting farming. How can we be supporting farming through the CAP when so many farmers are going out of business? We are inflating land values everywhere in the Community. However, every time we vote more money towards the CAP—and no country is voting more money than the United Kingdom—we do it to support not farmers, but landowners.
It is time that the message got through to those who are, after all, the paymasters of the system. The Government Front Bench has it within its power to put this right. It is time that we reminded ourselves that we are, with West Germany, one of the two paymasters of the CAP. In pouring this money out as we are, we are doing no service to agriculture but only to those who have the good fortune—I am one of them—to own land. We see the assets that we own going up and up in value.
It is time that we realised that we have, at some stage, to decide whether we are in earnest about reforming the CAP. We can decide it tonight, later this spring when we have further legislation, at some later stage this year or at some other stage. However, we must decide whether we will exercise the powers that we have as paymasters of the

system and put it right. We have only to say that we shall not go on paying out more and more money to support allegedly fewer and fewer farmers.

Mr. Alfred Morris: The hon. Gentleman has spoken of how well landowners have done under the CAP. Is not another result of the CAP that we can scarcely any longer speak of one agricultural community in this country, and that such are the sharply contrasting fortunes of arable and livestock farmers that we now hear of the two agricultural communities in Britain? Is that not another serious implication of the CAP?

Mr. Body: The right hon. Gentleman's intervention is music to my ears, because that is precisely the position. The beneficiaries of the CAP are, broadly speaking, the cereal farmers. The greatest exodus of farmers is to be found among the livestock producers. Of the 3,000 or so farmers who go out of business every year, the overwhelming majority are livestock producers. It is they who are consumers of the cereals. If we artificially inflate the price of cereals by imports levies and so on, forcing up the price of wheat or barley to 30 or 40 per cent. more than it should be, that extra cost has to be borne by the livestock producers. In effect, it is a tax on them, and one of the reasons why so many of them have been put at risk in recent years and why so many of them have gone out of business.
I am grateful to the right hon. Gentleman for having raised that point because it underlines my argument that we are not, despite what my hon. Friend the Member for Southampton, Test (Mr. Hill) said earlier, supporting farmers. If we were, there would be more, not fewer, farmers in business. It is time that we recognised that fact.
I hope that the time has now come for the Government to decide whether they are in earnest in their resolve to reform the CAP. If they allow it to carry on, so be it. We shall go on voting the money year after year. However, the Government have the power to say no. The House has the power to say no, and I hope that tonight we shall say that the time has come for this process to stop. We must show that we are in earnest. For that reason, I shall not be supporting the motion.

Mr. Neil Hamilton: This debate has shown the House of Commons at its best, and those who have protracted the proceedings beyond the time that the usual channels expected have no need to apologise for what they have done. It enables the country to reduce its net contribution to the Community by enabling other hon. Members who have been outside the Chamber throughout the debate to eat more of the surpluses.
One of the more peculiar characteristics of this debate has been the way in which the Whips have operated. I am accustomed to Government Whips sidling up to me at some stage in a debate and asking me to curtail my remarks or forgo them altogether. However, I find it astonishing when the Government Whips are joined by Opposition Whips embarking on the same errand. The hon. Member for Glasgow, Cathcart (Mr. Maxton) has been most assiduous in his attempts to persuade hon. Members not to continue at as great a length as they might otherwise do. I do not know whether that is because he has certain fears about reselection in his party and that we can expect to see him on the Conservative Benches in due course.
A characteristic of debates on the Common Market is how few speeches are in favour of the Government's position. The debates are entirely dominated, on both sides of the House, by critics of the Community. That may not be surprising in view of the difficulties that advocates of the Community face—difficulties that arise out of the untenability of the position that they are advocating.
The hon. Member for Thurrock (Dr. McDonald) opened for the Opposition. Her speech can perhaps best be described as entrancing—not in the sense that it was transfixing, but more that it was numbing. I am sure that my hon. Friend the Member for Mid-Worcestershire (Mr. Forth), during the contributions from the Opposition Benches, was more than once reminded of his previous manifestation in the European Assembly, particularly during the remarks addressed to us for 21 minutes, read word for word, by the hon. Member for Cynon Valley (Mrs. Clwyd), who appeared for three minutes at the beginning of the debate, for the 21 minutes of her own speech, and who has not been seen since.

Mr. Foulkes: I can take the insult to my hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton), although I assure the hon. Member for Tatton (Mr. Hamilton) that I am reliably informed that my hon. Friend does not have the kind of problems that the hon. Gentleman would wish upon him. When it comes to insulting two ladies, neither of whom is present in the House for only a short time—

Mrs. Kellett-Bowman: They should be here.

Mr. Foulkes: The hon. Member for Lancaster (Mrs. Kellett-Bowman) has, thankfully, been away for most of the debate. I hope the hon. Member for Tatton will get on with the substance of the debate.

Mr. Hamilton: We seem to have stung the Opposition into some response. Perhaps I can add injury to insult and point out that if the Chancellor is proposing in his next Budget to introduce VAT on speeches the efforts of the two hon. Ladies should be zero-rated.
It is a characteristic of this Parliament that the Opposition are ineffective. Having sat through 157 hours of Committee on the Finance Act 1984 and seen how little was achieved by the Opposition during that protracted proceeding, I have come to realise that that is what we can expect on every subject in almost every debate. Instead of being the watchdog of the constitution as Her Majesty's loyal Opposition, a little chihuahua has been buzzing around—

Mr. Deputy Speaker (Mr. Harold Walker): Order. I hope the hon. Gentleman will come to the business that is before the House.

Mr. Hamilton: I move to the meat of my speech when I point out that perhaps one of the reasons for the apparent lack of interest shown in the debate is a result of the abandonment ultimately of sovereignty which formerly lay in Parliament. Before these proceedings were protracted, it was discreditable that two measures which emanated from an authority outside the House had been proposed for discussion. The country at large does not realise how the European Community has diminished the authority of the House and limited the power of the Government to control their expenditure. Regional policy is a good case in point. Effectively, the maintenance of regional policy has been dictated not by the merits or otherwise of that policy, but

by the need to diminish the net contribution of this country to the European Community. The right hon. Member for South Down (Mr. Powell), in a devastating indictment of the constitutional impropriety that we have been invited this evening to support, pointed that out many times.
In an intervention in the speech of my hon. Friend the Economic Secretary to the Treasury I asked about the legality of this proceeding and referred to the provisions of article 199 of the treaty, which are designed to ensure that the Community budget is not overrun in any one year. It is impossible, within the terms of the treaty, to provide for such an overrun to be paid for. I pointed out that the treaty can only be amended under the provisions of article 236, which would require an ancillary treaty—a course of action that the Government do not propose to adopt.
The constitutional basis of the loan, or whatever one may call it, has been raised in many speeches, and much fun has been had as to the nomenclature of this amount of money — whether a loan is equal to a reimbursable advance or whether it is a gift or a bequest. It cannot be a gift. It can only perhaps be a bequest. Let us hope that it is bequest in the form in which bequests are normally given—as a result of a last will and testament. Perhaps this is the last will and testament of the overspending Community, but I doubt it.
An alternative course of action might have been available to the Government. I shall be interested to hear whether I am on the right lines. Would it not have been possible for the Government to solve the problems which would have arisen in this country, in so far as they would have affected individuals who might otherwise have been expected to be paid out of the Community, by paying them separately? If this amount of money is voted through this evening, we shall have to subsidise others in the Community as well instead of confining the benefit of what we are proposing to people in our own country.
The reimbursement proposed is to come back to us from June 1986 onwards, although, like many other hon. Members, I doubt whether we shall ever see it. Certainly no interest is proposed on this so-called advance.
A question which we might properly ask, and which was asked by the Select Committee in its report, is whether the European Assembly will be involved in the reimbursement process. If it is, that will mean that yet another example of the way in which control of expenditure, on which the constitutional rights of the House have been built, has been taken out of our hands. The problem with which we are dealing derives entirely from the control of public expenditure. My right hon. Friend the Member for Worthing (Mr. Higgins) arid others referred in their speeches to the battles that the Government have had on public spending in recent weeks. The argument has been whether tax cuts or further public expenditure will go to reducing unemployment. What is certain is that encouraging expenditure not in this country but elsewhere in the Community will be extremely ineffective in reducing unemployment here.
Budgetary discipline in terms of the European Community is almost a contradiction in terms. The result of accepting what is proposed, following on from the negotiations that the Government have carried out in the Community, is that we shall, of course, pay less than we would have done had there not been agreement, but the net contribution that the Government will provide to the Community will be greater than it has been in recent years. Therefore, let nobody think that as a result of the


agreement in the Community we shall be reducing public expenditure in the long term. Public expenditure in the Community will rise inexorably because there are no effective controls proposed as part and parcel of the negotiations on agriculture spending. In 1986 and in the years following the maximum amount, which will also no doubt be the minimum amount, expendable on agriculture will be based on spending in 1984 and 1985—two years of record production and expenditure. In addition, there will be a percentage based on the increase in own resources which will accrue in years to come. Even that limit, inadequate as it is, may be exceeded if there are exceptional or aberrant cases. That may be done, not unanimously as was said erroneously by several hon. Members, but on a majority vote of the member states of the Community.
The advance is designed to be reimbursed to us by way of clawback, but that clawback is disregardable in special, undefined, circumstances. So we shall go on with this agricultural rake's progress, which, as was pointed out by my hon. Friend the Member for Holland with Boston (Mr. Body), benefits not the agriculture industry, but only those whose assets are tied up in land.
During 1984 we were spending £100 million per week storing, destroying and dumping surpluses and aiding the economies of those whom we are building up arms to oppose in the unlikely but possible event that we may be drawn into conflict with them in years to come. Agriculture expenditure will rise to meet the ceiling of expenditure which is allowable. That is the ineluctable law of the Community, because the rate of rise in agriculture spending will be in line with the own resources basis of the Community. It is a form of Parkinson's law. That is the opinion expressed by the Select Committee in its report on the Supplementary Estimates and in the report on the Fontainebleau summit some months ago. Paragraph 7 of the Seventh Report from the Select Committee on the Treasury and Civil Service reads:
However, on what is probably the key component of any lasting settlement, Budgetary control, little or no substantive progress was made on the position agreed at the Brussels Summit.
One of the reasons that is cited for requiring an increase in own resources in the Community is the possible accession of Spain and Portugal. It is certain that further irresistible demands will be placed upon the agriculture budget of the Community if either or both of those nations become member states. In addition to all the other mountains and lakes, we shall have mountains of tomatoes and lakes of olive oil and wine.
One of the most absurd arguments in favour of an increase in own resources to fund the admission of Spain and Portugal instead of requiring them to impose disciplines on their own spending on agriculture to benefit the rest of the Community is that it is necessary to do so to preserve democracy in those two countries. It is difficult to believe that allowing them to accede to an institution in which there is no effective control from an elected position, financial or otherwise, that can be converted into law will do anything to safeguard or promote democracy on the Iberian peninsula.
I can see no reason why we should abandon the one real control that we have over the growth or the reduction of

waste in the Community—the ceiling on the expenditure which is available by way of own resources to the European Community.
I accept that the Government have tried during negotiations to get the best deal for Britain. I join those of my hon. Friends who have congratulated Ministers on the efforts that they have made to benefit Britain. Negotiation is a long, time-consuming and tedious process, and my right hon. and hon. Friends have had considerable success. In essence, diplomacy leads to compromise. That is the essence of that profession. It has brought certain problems for us in many parts of the world in years gone by, including more recent years. If compromise is inevitable in any diplomatic negotiations, it is all the more important for the House to take the final limit out of the hands of the Government and to impose a limit that they will be able to tell those who are pressurising them in the Community for more expenditure that they are unable to breach because the House will not stand for it.
It is not the degree of success that my right hon. and hon. Friends have enjoyed in the Community in negotiating on the size of Britain's budget contribution that matters. The principle that really matters is that of eradicating waste, not freezing in time or in aspic the degree of wasteful expenditure that now takes place. We shall reduce the wasteful expenditure by removing the basis of the problem which caused the need for a budget settlement to arise, not by reforming the budget settlement itself.
As the Government have not managed to remove the basis of the problem to any acceptable degree, I shall not be able to support them when the Division takes place. I invite my right hon. and hon. Friends to place upon the Government a limitation that they themselves seem unable to impose. Let us take the matter out of their hands so that the rest of the Community realises that they can go thus far and no farther.

Mr. Hugh Dykes: Bearing in mind the strictures that were applied to the hon. Member for Cynon Valley (Mrs. Clwyd) for coming into the Chamber rather briefly, making a speech and then disappearing, I must be careful. I think that my credentials are somewhat better than those of the hon. Lady because I have been in and out of the Chamber during the evening. At one stage when I wanted to listen to the comments of some of my hon. Friends I was called out of the Chamber. I hope that the House will accept my apologies. I thank you, Mr. Deputy Speaker, for allowing me to participate in the debate. In view of the circumstances, it behoves me to be brief and to make a spontaneous contribution as opposed to reading a carefully prepared handwritten text and delivering a tirade on the EEC, which has been the hallmark and characteristic of most of the speeches of my hon. Friends. I shall read them with great care when Hansard appears tomorrow. Once again, as always, the House gets bogged down in these speeches by a relatively small number of Members on both sides in their traditional, posturing outbursts about the fundamentals of membership. That is what it is usually all about, or it is to that that the comments end up referring in an unfortunate way.
I must concede, bearing in mind, for example, the notable contribution of the right hon. Member for South Down (Mr. Powell), that there is a strong argument for


establishing the important difference that even those who are keen adherents of our membership of the Community—and I am sure they have already indicated this in the debate — have at least some doubts about the actual procedures whereby the money is voted. There is, therefore, a substantial difference between those two points. There are the technical or constitutional — or both—objections to the modalities of the voting of this money, instead of having separate or secondary legislation or a proper order, and the more fundamental arguments about membership. That is why the latest speeches raking over the old arguments about the common agricultural policy do not take us any further.
I limit myself to making two or three brief points. First, since the matter has been dealt with in that fundamentalist way, I reiterate my own view, and what I detect to be the substantial view of the overwhelming majority of Members of the House, that there is powerful support for continuing membership, an enthusiasm about the terms and details of the Fontainebleau agreement and the document that was submitted to that gathering as the Government's testimony of their enthusiasm for the EEC and an expectant and optimistic anticipation at long last—and let us finally cease all those tedious delays—of real, solid developments in the Community.
I was very struck by the comments of my hon. Friend the Member for Southend, East (Mr. Taylor), who is no longer present. He said that the real trouble is that it always insists on unanimous voting and therefore the Community can never make proper decisions. I must not expect that he would agree, were he present, if I were to suggest that he, or perhaps other hon. Members who take a hostile view of the EEC, would also be shrilly complaining if the system of majority voting were adopted—

Mrs. Kellett-Bowman: Absolutely.

Mr. Dykes: —in greater measure, not only on the most important aspects of Community membership and collective decision-making, but on the lesser items as well. There would be a howl of protest and an expression of disgust, particularly from the Opposition Benches, at that idea. However, the majority voting enshrined in the Fontainebleau documents is the only way now to take the Community forward. Indeed, that means that all national parliaments of all the member states have to accept the existence of Community legislation and Community procedures.
What I thought was equally absurd, although not a contradiction in that sense—just an emotional outburst that revealed ignorance without any knowledge of the facts—was the comment made earlier by the hon. Member for Walthamstow (Mr. Deakins), who is no longer present. He said that he hoped that other national Parliaments would be as solicitous as we are about their financial control procedures and expenditure control procedures nationally and vis-à-vis the Community, but that of course was not the case because they were terrible foreigners and had no idea about parliamentary control, the exercise of genuine parliamentary democracy and real control over Government spending. What arrant rubbish and ignorant nonsense that is. There are those of us who want the country at long last to be an enthusiastic member of this international community which we joined years ago, and it is about time we settled down to it.
The hon. Gentleman probably has no idea of what happens in other Parliaments. It is chauvinistic rubbish to

suggest that they have no proper control procedures and a gross insult to our friends and colleagues in the Bundestag and in the European Parliament who wish to develop these procedures and exercise greater control not only over their traditional share of the Community budget but over other areas of spending. It is particularly absurd for an Opposition Member to make that kind of comment—how heroic the House of Commons is, that hundreds of Members of the House are most concerned about this kind of thing and that it does not exist anywhere else—when, while he was addressing the House, thee was a total of approximately 14 Members present in the House. What rubbish that kind of thing is.

Mr. Body: Is my hon. Friend suggesting that these proceedings would have taken place even if Mr. Oliver Smedley had not brought his case?

Mr. Dykes: I was making a somewhat different point about the expenditure control procedures of this House not necessarily being connected with a judicial procedure outside.
I believe that votes of this kind could be better handled in the future. I believe that many hon. Members accept that—for example, there was a great deal of support for the comments of my right hon. Friend the Member for Worthing (Mr. Higgins)—but that is not the same as saying that one is fundamentally hostile to membership of the Community. It is about time for this country, which prides itself on being a receptacle of progress and imaginative handling of international as well as domestic affairs, to accept that we are entitled, with apology to the Labour party, to be most enthusiastic about our membership of the Community.

Mr. Eric Forth: This debate gives us the opportunity to look back over the Community's expenditure control record but also to look forward. The question has been asked time and again why the EEC seems so incapable of exercising financial control over its own activities. I believe that the answer is relatively simple and that it provides the clue to the future. It may also provide a clue as to why so much disquiet has been expressed today.
There are two budgetary authorities in the EEC—the Council of Ministers and the European Parliament. Because each of the 10 member countries has different vested interests in different items of expenditure, in the Council of Ministers they all tend to support one another's favourite items, with the result that none of them, jointly or singly, can take any effective decisions on expenditure limitation. Such a one-way process can lead only to increased expenditure. That is compounded by the fact that, in the past few years, the European Parliament has sought other ways in which to increase the Community budget. Parliamentarians, too, have their own pet schemes and their own methods of spending other people's money ever more rapidly and, they would argue, more effectively.
The result is that the two authorities which in theory should be acting to control and regulate the budget manage in their different ways to increase Community expenditure. Put in the simplest terms, that is why the Community has proved incapable of controlling its


expenditure in the past. It also provides the clue to the problem ahead, because neither of the factors that I have described is likely to change significantly.
The Government have asked us to accept that there is now a new feature—budgetary discipline. We have been offered a document which seeks to provide a procedure whereby the forces that I have described will somehow be curtailed. In fact, however, it does nothing of the kind. Perhaps the Minister will explain how a document containing patent loopholes can be an acceptable vehicle for budgetary control and discipline in the future. If there is one thing that we have all learned, it is that things are bad enough when a European Community document claims that it will achieve good things and then fails to do so but when such a document does not even claim to be doing anything particularly effective we are entitled to be more than usually suspicious.
The document before us refers frequently to "exceptional circumstances", "aberrant developments" and other delightful possibilities. Then there is the sheer nerve of the claim in one of the final provisions that the framework for discipline established can be altered if the discipline proves too onerous. How on earth can that ensure effective control of Community expenditure?
To tell us that somehow there will be a political will in the future which has not existed in the past is to ask us to suppose that the Council of Ministers will magically decide to alter this framework in the future and to suppose that the European Parliament—understandably, it is ever anxious to promote its powers and influence—will have a new vision of Europe under budgetary discipline. To ask us to expect that both those institutions will turn over a new leaf and have a new idea of a Europe under controlled financial provisions is to ask far too much. That would be bad enough. But another element will enter this equation making it impossible to control — the proposed enlargement of the Community, to which my hon. Friend the Member for Tatton (Mr. Hamilton) referred.
Another aspect is even more worrying than the fact that, legitimately, the proposed new member states—Spain and Portugal — will add to the existing problem of agricultural surpluses. They will do that even on existing levels of production and with existing products. What will happen when the Spaniards persuade us to give some of the Community's money for irrigating their agricultural areas to increase output? That will be bad enough, but what will happen when the EEC's economic and political balance alters? The resulting problems are, as yet, unforeseen and little discussed in the context of enlargement.
When Spain and Portugal enter the Community, there will be a potential realignment in Europe, giving rise to the possibility of Greece, Italy, Spain, Portugal and, if it suits her, France lining up to demand the shifting of available resources from the traditional recipients of agricultural support, the northern countries—which have received support for cereal and milk production—to the south. Spain and Portugal are poorer countries and will have a strong claim. They will demand that we give additional support to their products.
That same demand will be made in the context of regional and social policies and the many other policies that hon. Members have claimed benefit the United Kingdom. Let us not suppose for one moment that the

relatively poorer countries, such as Spain and Portugal, will allow the United Kingdom to continue to receive its present share of regional and social fund money. The real costs of enlargement of the Community are potentially enormous. There will be the cost of shifting the moneys now available to the Community away from the United Kingdom. Britain's claims on the money available from the common agricultural policy have been small enough, but, inevitably, money available under the CAP and from the regional and social funds will move from Britain.
However much the rationale behind the enlargement of the Community is based on grand arguments about the defence of democracy and the strengthening of the West, when it comes down to the reality of the budget of the enlarged Community, resources will move inevitably from the north to the new south of the enlarged EEC.
We should look not only at the temporary stop-gap unnecessary expenditure which has been suggested but at the question that will be posed later this year, after the completion of the enlargement negotiations. We will be asked to agree further resources for the EEC. That question must be seen in the context of the viability of the budgetary discipline document about which we have had as yet little satisfactory explanation. We must consider the problems caused by the enlargement of the Community and the failure of the Community to have the political will to control its expenditure.
I hope sincerely that the House will be given ample opportunities to discuss the proposed enlargement of the Community in its full context in the light of the important budgetary effects which will influence not only the United Kingdom in the long term but the EEC's shape, viability and direction. We have not yet been asked to consider those matters. We have been asked to consider merely the tip of a large iceberg. I hope that on another occasion the House will seriously consider these fundamentals of the future of Europe.

Mr. George Foulkes: Perhaps unexpectedly, this has been a wide-ranging debate, thanks to—in their different ways—the right hon. Member for South Down (Mr. Powell), my hon. Friend the Member for Cynon Valley (Mrs. Clwyd) and Mr. Speaker. I must tell the right hon. Member for South Down that we do not in any way object to such a wide-ranging debate.
The hon. Member for Harrow, East (Mr. Dykes) did not have the opportunity to hear a great deal of the debate. If he had, he would have been surprised on a number of occasions by the lack of posturing by hon. Members. Perhaps the most telling criticism of what the Government are doing came from those who are basically in favour of the European Community. That makes them all the more—

Mr. Dykes: Dangerous.

Mr. Foulkes: The hon. Gentleman will find out when he reads Hansard tomorrow.
It is clear that most hon. Members did not want this debate, as the hon. Member for Tatton (Mr. Hamilton) rightly said in one of the more lucid and unobjectionable parts of his speech. In some ways it must be an unexpected debate for hon. Members who were in the House on 27 June 1984—and this has been referred to already—when the Prime Minister said:


article 199 of the treaty provides that the revenue and expenditure shown in the budget shall be in balance, so it is not right to raise loans for budgetary purposes … I believe that methods other than loans will have to be found to bring the budget into balance, because it is contrary to the treaty to have a deficit on the budget, and that must be taken into account in any proposal."—[Official Report, 27 June 1984; Vol. 62, c. 1003.]
I suspect that the Minister will try to argue that what we call the reimbursable advances are not loans. But as hon Member after hon. Member has said, that is a semantic point. They are loans by any other name; they are loans in every essence. Therefore, what the Prime Minister said on 27 June has been proved to be wholly incorrect.
I can, therefore, understand the nightmares of the Economic Secretary who, in a rare moment of confession to the Select Committee, said:
In the middle of the night on two occasions I found myself thinking how should I explain these proposals to the House of Commons."
As we have seen, he has had great difficulty in explaining them.
There has been a U-turn from what the Prime Minister said in June. The whole basis is being questioned. Conservative Members have even gone as far as saying that it could well be an illegal budget. One hon. Member said that, if the Government took one attitude towards the illegal budget of Liverpool, they should not take a different attitude towards the Community.
Having about-turned on the principle, the Government have also about-turned on the procedure. That is peculiar because of the evidence given to the Joint Committee on Statutory Instruments by Mr. Fitchew from the Treasury who argued strongly and eloquently—as the right hon. Member for Worthing (Mr. Higgins) can testify — against the procedure currently before us. He said:
So far as the consolidated fund bill route is concerned, the convention, as I understand it, is that the special consolidated fund bill itself would not be debated. The supplementary estimate can be debated …."—
we are debating it now—
at the cost of preventing other estimates being debated, because the days available in the Parliamentary year for debating estimates are limited.
Mr. Fitchew also argued against the current procedure because there would be no reference to the House of Lords.
I should like to put on record both my thanks and those of my hon. Friends to the Select Committee on the Treasury and the Civil Service for producing its third report so quickly. The Select Committee expresses disquiet at the way in which this matter has been brought before the House.
I should also like to put what we are considering into a slightly wider perspective. Although she was perfectly in order, I shall not go quite so far as my hon. Friend the Member for Cynon Valley, but it is true that the finances of the Community are in a shambles. There is no better word for it. My hon. Friend has participated eloquently in many of these debates and has pointed out on many occasions the shambolic nature of Community finances.
However, one does not need to take my word for it. One can take the word of the new chairman of the Council of Finance Ministers, Signor Andreotti, who has admitted that as yet there is no agreement between the Council and the Parliament on the 1985 budget. Signor Andreotti says that there is no agreement on budgetary discipline. He is quoted in the Financial Times as pinning his hopes on

guiding the EEC out of its budget crisis—it has no budget for 1985—on a quick end to the enlargement negotialions with Spain and Portugal.
He is anticipating by a couple of months the entry into force of the decision on the increase in revenue from VAT. Therefore, it is to be expected that the increase in own resources from VAT that we as a Parliament are to be asked to approve will come into force some months before agreement is reached.
Signor Andreotti went on to say:
But West Germany ties increased contributions to the EEC with the fact of enlargement, scheduled for January 1, 1986. Signor Andreotti wants an end to the enlargement negotiations during the spring and then a rapid ratification by national parliaments of Spanish and Portuguese accession.
Assuming that there is to be an end in the late spring to the negotiations over the accession of Spain and Portugal, ratification will then be rushed through the House of Commons. The increase in own resources from VAT will then have to be rushed through the House of Commons.
If the right hon. Member for South Down is concerned about the procedures that have been adopted so far relating to the Supplementary Estimate, perhaps I may quote what was said by somebody on the other side of the Atlantic. If what is anticipated by Signor Andreotti comes to fruition, "You ain't seen nothing yet". The result will be that more and more measures of this kind will be rushed through the House of Commons.
We oppose the loan for two main reasons. The main condition which the Government have set themselves for the payment of the loan—for that is what it is—has not been fulfilled. It was a question not just of budgetary discipline but of budgetary discipline being guaranteed. That is not a word which we on this side of the House take lightly. I hope it is not a word that the Minister of State who is to reply takes lightly. As was said by the hon. Member for Wolverhampton, South-West (Mr. Budgen) in his questions during the proceedings in the Select Committee on the Treasury and Civil Service — it is reported in detail in the first report of the Select Committee on the Treasury and Civil Service—we have given up two powerfull vetoes: the veto on overspending, and the veto on the increase in own resources.
What do we have in return? We have the illusion of budgetary discipline. There is no regulation to enforce it. It is not legally binding because, as several hon. Members have said, agriculture expenditure is demand-led and therefore uncontrollable. I hope that the Minister will say what he or his right hon. and hon. Friends in the Treasury will do about meeting the Agriculture Ministers to ensure that the farm price review does not get out of control, because that is a crucial element. Although one Conservative Member said that it is not just prices but the level of production that matters, certainly price is an essential and important element. I hope that there will be some sign that the Government will use the opportunity of a joint meeting between Finance and Agriculture Ministers to make sure that the Agriculture Ministers are controlled. Once they fall under the influence of the farming lobby they tend to get a little out of control.
We have also heard that the budgetary discipline is an illusion because it requires only a qualified majority to alter it. We know that it is an illusion because of what other people say about it. Even Michel Rocard—for those who do not attend these debates I point out that he is the French Agriculture Minister—said:


It allows sufficient flexibility for the continued operation of the CAP.
Rather more forcefully, Agra Europe, a well-known and influential journal in relation to what happens in Europe, has a headline "Budgetary discipline agreement 'value-less'." It goes on to say that it is
not worth the paper it is written on.
The two major flaws that have been identified by several hon. Members on both sides of the House are the exceptional circumstances let-out and the qualified majority.
By far the most eloquent criticism of the illusory nature of the budgetary discipline appears in that well-known magazine Farmers Weekly, which has a headline:
Nothing to fear in EEC formula.
That is a magazine for farmers, not for accountants or politicians. It says:
Farmers have nothing to fear from the EEC budget discipline … it is so full of escape clauses … the ceiling has been set so high that by 1987, the year after Spain and Portugal become EEC members, the formula allows for an extra billion ecu … to be spent on farm support.
It finishes by saying:
When Spain and Portugal join the EEC in 1986 there will be a stronger majority of countries benefiting from the CAP, with the ability to out-vote the 'payers', Britain and Germany, if they object to spending increases.
What could be a more eloquent testimony to the illusory nature of budgetary discipline? The Government have clearly failed on their own criteria.
We oppose the proposal for another reason which has been mentioned by several hon. Members, particularly the hon. Member for Southend, East (Mr. Taylor). It relates to the fact that spending is about priorities. We are talking about spending priorities in this context both at home, which the hon. Gentleman touched on, and in Europe. Cut after cut at home has been referred to this evening, not by Labour Members — the normal complainers about Government cuts—but by Conservative Members who are becoming increasingly worried. We have heard about the anxiety about cuts in student grants. There has been only a mild amelioration on that. We have heard complaints about the cuts in overseas aid, in the external services of the BBC, and in heating support for old-age pensioners. Hundreds of thousands of pensioners are now getting up to £1 a week less in their heating support. We have also heard about cuts in the regional support grant.
It appears that only two areas are exempt from Government controls. One is fortress Falklands, which I hope to speak about on many future occasions, and the other is the European Community, especially the CAP. We need to say to the EC that the CAP, which is effectively a bottomless pit, is not acceptable because the Government do not have a bottomless purse, and because we have other priorities on which we wish to expend resources.
The matter also concerns priorities within the EC budget. The draft budget of the EC for 1985 shows an increase in agricultural spending, from 67 per cent. to 74 per cent. of the budget and further proposed increases, not the guaranteed controls, about which the Government assure us. The social fund is the Community's main weapon against unemployment, yet it gets a measly 5 per cent. of the budget, although we know from our experience, the Community and the EC annual report that unemployment is increasing. In 1978 unemployment in the

Community as a whole stood at 5·5 per cent. Now it stands at 11·5 per cent. Hon. Members on both sides of the House have expressed anxiety about the effect of unemployment on young people. In the under-25 age group unemployment has increased from 13·5 per cent. to 24·5 per cent.

Mr. Marlow: Would the hon. Gentleman like more money to be spent through the European social fund? If so, why does he believe that money which is sent to Brussels and returned to us is more efficiently used than money which we decide to spend directly?

Mr. Foulkes: That is a good point. It relates to the question of Community spending versus domestic spending. The irony is that at present the Government are so reluctant to spend money from their domestic budget on employment programmes that the Community is one of the few areas from which we are getting money.
I turn to the matter of instilling confidence in our young people. Mr. Delors, the new President of the Commission and former French Finance Minister, recently addressed the European Parliament in Strasbourg about pulling down the frontiers of Europe. He said of young people:
Pulling down the frontiers will not convince them of our resolve to do away with massive unemployment. Here, too, the credibility of the European venture is at stake
It is at stake. Unless we encourage the Community to switch priorities from the uncontrollable expenditure of the CAP to such areas, young people will lose confidence in the EC and in the politicians who lead it.
I now come to the point raised by my hon. Friend the Member for Cynon Valley. The areas scheduled for cuts in the EC budget are areas which my right hon. and hon. Friends wish to see expanded—for example, transport, energy, science and technology, research, industry, information and innovation. The Community should spend more money on them.
We wish to see expenditure on overseas aid to be given higher priority. We heard from the Prime Minister—it was echoed by other members of the Government—a great fanfare of trumpets about the fact that the decision made at the meeting of the Heads of Government in Dublin would result in 1·2 million tonnes of cereal being sent to African countries, especially Ethiopia. That is a miserable amount when one considers that there are 12 million tonnes of cereals in intervention. It is even more disgraceful when one discovers, from answers to several questions that I put to Ministers, that although the decision was taken on 4 December and was trumpeted by the Prime Minister and others, and although we would have expected a sustantial amount of the 1·2 million tonnes to be on its way to feed the starving people of Africa, only 13,000 tonnes of grain have arrived there. It is about time that the Minister and his colleagues got the bloated bureaucrats of Brussels off their behinds in the Berlaymont and got the grain to the countries in Africa.
I urge my hon. Friends and Conservative Members to vote against the Supplementary Estimate. They should vote against it because of its doubtful legality, because of the doubtful precedent that it creates, because it represents the wrong spending priorities at home and in Europe, and, above all, because there is no guarantee of budgetary discipline. Some Conservative Members may be thinking of waiting until we have the debate on the increase in own resources before rebelling against the Government. I urge them not to wait, because there are already great dangers that that decision will be pre-empted. We know that £165


million has already been advanced in own resources, and we now have this loan of £120 million. The time to tell the EC "Enough is enough" is now.

The Minister of State, Foreign and Commonwealth Office (Mr. Malcolm Rifkind): I listened with great interest to the speech of the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes). I and my hon. Friends noted with interest the announcement yesterday that the Labour party — Her Majesty's Opposition — attach such enormous importance to Community issues that they have decided to disband their shadow EC team. The hon. Member for Livingston (Mr. Cook) will go to greener pastures. When the hon. Member for Livingston was appointed, we were told that he was to mastermind the campaign for the European Parliament elections. His new appointment is to mastermind the Labour party's next general election campaign. I would say only that, recollecting that his efforts before the European elections resulted in the Labour party losing that election and coming second, I hope that he has equal success in his new appointment.

Mr. Foulkes: Perhaps I may correct the Minister on two points. There is still a European team, represented by my hon. Friend the Member for Hamilton (Mr. Robertson) and myself, in the shadow foreign affairs team. Therefore, with no disrespect to my hon. Friend, the team is as strong as ever. Our aim in the next general election is to do what we did in the European election — [HON. MEMBERS: "Lose."] No. It is to double our representation in this Parliament, as we doubled it in the European Parliament.

Mr. Rifkind: I have known the hon. Gentleman for many years, and I note that his modesty is as strong as ever. Indeed, we all hope that the Labour party's results in the general election are similar to those in the European election.
The hon. Member for Thurrock (Dr. McDonald) asked whether and, if so, what proportion of the money would be spent in the United Kingdom. Our best estimate is about 50 per cent., through agricultural, regional fund and social fund expenditure. Several hon. Members, especially my right hon. Friend the Member for Worthing (Mr. Higgins) and, in a somewhat flamboyant way, the hon. Member for Carrick, Cumnock and Doon Valley, asked whether the money would be a loan or an advance and what was the difference between the two. I do not argue that there is any significance between the two, and that is the basis of the point that is really at issue; it is not relevant whether we describe this as a loan or an advance.
The point to which the Prime Minister was referring in June was whether it was competent under the treaty, and in particular under article 235 of it, to use the mechanics of the treaty to provide for loans, given that the treaty does not permit deficit financing. Because we believed that it would create a highly undesirable precedent to allow the treaty in its present form to be used, in effect, to produce a loan that would allow deficit financing to take place, the British Government, along with other Governments, insisted that if there was to be any accommodation of this extra expenditure it could not be under the treaty but had to be outside the treaty through an intergovernmental agreement. For that reason, the agreement reached is an intergovernmental agreement and not one under the terms of the treaty.
My right hon. Friend the Member for Worthing then asked, in relation to the procedure that the Government have adopted, why, when the matter had been considered by the court and by the Court of Appeal in the case brought by Mr. Smedley, the Government did not decide to take the matter to the House of Lords. The simple answer is that we won in both earlier courts and that it is not for the party that wins to take the matter to the House of Lords.
Several hon. Members, notably the right hon. Member for South Down (Mr. Powell), asked why, having won, the Government did not continue to use the Order-in-Council procedure and why the matter was before the House in the form of a Supplementary Estimate. When the court considered the Order-in-Council procedure under the action brought by Mr. Smedley, it found in the Government's favour. Had we been able to have these matters considered during 1984, it was our intention to use the Order-in-Council procedure.
Because the intergovernmental agreement refers specifically to a commitment to introduce and agree these matters in 1984, we were concerned lest, if in 1985 we continued to use the same procedure, there would be a considerable possibility of further challenge. The Government have been extremely conscientious in desiring to avoid legal problems over the procedure they employ. For that reason, it was thought safer, and for the avoidance of doubt, to use the Supplementary Estimate procedure.

Mr. Marlow: We are talking about increasing our commitment to the Community by £120 million. I understood my hon. Friend to say that we would get about half of that back by way of the agriculture and social funds. In other words, we are talking about increasing our net contribution by £60 million. What shall we get in return for that? What is the bargain or benefit? Why should we agree to this expenditure?

Mr. Rifkind: I am first dealing with specific questions raised during the debate. Later I shall come to general points, including the proposition to which my hon. Friend refers.
I am in honour bound to respond to the hon. Member for Inverness, Nairn and Lochaber (Mr. Johnston), who complained that in the past the Minister replying to the debate had not even attempted to reply to him. His main point was about the 1985 draft budget and he wondered what would happen if it was not approved.
The European Parliament has chosen to refuse to approve that budget. Consequently, there is no budget in effect for the current year. Under the terms of the treaty, the provisional twelfths regime operates. Under that, the Community can spend no more than it spent in the equivalent month of the previous year. We are bound by that until the European Parliament agrees to a new budget, and the onus is on it if it wishes to see a more liberal procedure.
The official Opposition have a nerve. In his final remarks, the hon. Member for Carrick, Cumnock and Doon Valley said that the Labour party does not take budgetary discipline lightly, but there have been virtually no Labour Members present during the entire debate. Furthermore, when the House of Commons debated budgetary discipline on 11 December last year, and the Opposition had an opportunity to defy the House and to show the public exactly how they felt about the matter,


they did not divide the House. They refused to vote, and allowed the Government's motion to be approved without a Division. That was an extraordinary response by an Opposition who claim to believe seriously in budgetary discipline.
Could the Opposition also kindly explain to the House and to the country why, under the last Labour Government, agriculture expenditure in the Community increased each year by an average not of 5 or 10 per cent. but of not less than 28 per cent? That was the record of the Labour Government when they had to deal with these matters.
Under the present Government, the average increase in agriculture expenditure has been reduced to 11 per cent. On the proposals likely to be put before the Community in the next few weeks, an increase of 5 per cent. is expected. That is a dramatic improvement. It is not as great an improvement as we or the people of Britain would like but it shows significant progress in the direction that the House has called for for many years and to which Her Majesty's Government are committed.
As the last Labour Government presided over annual increases of not less than 28 per cent., I am not prepared to hear Opposition Members say that they are concerned about the matter and that they would be effective in dealing with problems.

Mr. Spearing: The hon. Gentleman would not wish to mislead the House. Is it not true to say that all those years were during the transitional period, when prices rose and levies were increased as we entered the Community?

Mr. Rifkind: With respect, that is a different point. I am not now talking about Britain's net contribution or the question of a refund. I am talking about agriculture expenditure. There is no reason why such dramatic increases should have occurred if the Opposition, when in government, had been effective in dealing with these matters.
Criticisms have also been made by those hon. Members on both sides of the House who are basically opposed to British membership of the Community and do not wish the problems to be resolved in a harmonious and flexible way that would strengthen the Community. I do not say that all those who have made criticisms take that attitude. However, a number of my hon. Friends and Opposition Members are basically hostile to the Community. They would be delighted if the Community were to face a crisis, and hope that the United Kingdom would do nothing to help to resolve that crisis. Because the Government do not share such objectives, we cannot be expected to share such tactics. I shall therefore concentrate my remaining remarks on criticisms made by those hon. Members who take the view that membership of the Community is desirable but who, from that standpoint, wish for a major reform in the operation of Community finances.

Mr. Beaumont-Dark: My hon. Friend glosses over the problem of agriculture and proposes to turn his attention to those hon. Members who oppose membership. Could my hon. Friend answer the point made in Fanners Weekly that farmers have nothing to fear, because there are to be no changes that will not benefit them? Would not my hon. Friend agree that that is the great weakness and the great drain on the finances? If the farmers have nothing to fear, the rest of us have a great deal to fear.

Mr. Rifkind: There are different views on that point. [HON. MEMBERS: "Ah."] I can quote some views different from those expressed in Farmers Weekly. The German Finance Minister, Mr. Stoltenberg, says that
We now have for the first time an effective instrument to bring about a sensible control of expenditure".
The French association of chambers of agriculture has described the budgetary discipline proposals as
a real financial straitjacket for the CAP".
The Italian newspaper Il Sole referred to
a complete change in the direction of the CAP".
Those quotations show that there is a different assessment.
My hon. Friend the Member for Nottingham, East (Mr. Knowles) made a most important point. He stressed what the Treasury and Civil Service Select Committee also stressed — the important factor in these budgetary discipline proposals is the position of countries that are, or are likely to become, net contributors. That is a fundamental change which is taking place in the Community and which could have a profound effect on its financial future. As a result of these measures, any increase in the Community's net expenditure — which would result in an increase in our net contribution—will involve a two thirds refund for the United Kingdom. That means that our contribution to the increase will be fixed at a maximum of 7 per cent.

Mr. Foulkes: Will the Minister give way?

Mr. Rifkind: Not yet. That should be compared with France, which will have to finance 27 per cent. of expenditure, and West Germany, which will have to finance 32 per cent. of contributions, without any compensating balance to reduce the burden on their national exchequers. It is therefore easy to see why Herr Stoltenberg, the German Finance Minister, and the French Finance Minister will have an enormous vested interest in ensuring proper control of expenditure.

Mr. Foulkes: If the Minister is so convinced about the effectiveness of budgetary control, will he now give the House the assurance that the Economic Secretary to the Treasury failed to give earlier—that the Government will not introduce ever again another Supplementary Estimate for money for the Community?

Mr. Rifkind: If the hon. Gentleman had done his homework properly he would know that we have still to find a way in which to resolve the problem for the current year, before the new budgetary discipline procedures have come into effect.

Mr. Foulkes: Ah.

Mr. Rifkind: The hon. Gentleman knows perfectly well that that is the case. He knows that, under the agreement that has been reached, it is the price fixing of a few weeks' time that will determine for the first time the budgetary discipline proposals.

Mr. Budgen: Will my hon. Friend give way?

Mr. Rifkind: Perhaps my hon. Friend will allow me to continue—I have only a few minutes.
The Government's objective throughout the negotiations has been to ensure that the Council of Ministers and the Commission have the power to control agricultural expenditure, and that of the Community as a whole. We believe that the measures that have been agreed will provide a new and much improved basis for controlling that expenditure.

Mr. Budgen: Will my hon. Friend give way?

Mr. Rifkind: Not now.
We have also been anxious to ensure that if, despite these new procedures, some items of which have been described as exemptions or loopholes, Community expenditure increases substantially, the United Kingdom taxpayer is protected from the effects of such increases in a way that has never been possible in the past. Because the British contribution to any increased expenditure, which would increase our net contribution, can represent only 7 per cent. of the total expenditure involved, we can say with considerable justification that the United Kingdom has achieved a protection for the British taxpayer and for the House that has not been available under any previous rules.
Under the Labour Government, not one ecu was recovered for the British taxpayer. That is to the permanent shame of the Labour party. When it had the opportunity, it failed completely to save the British taxpayer money. We have already recovered £2·5 billion for the British public and ensured that no increases in Community expenditure can produce an intolerable burden for the British taxpayer.
The vast majority of the British public support our membership of the Community and want the financial controls of the Community to be improved substantially. They also expect their Government to act responsibly and constructively in improving the Community.

Mr. Teddy Taylor: rose—

Mr. Rifkind: On that basis, I can say that the conditions that the Government laid down have been satisfied. I therefore invite the House to approve the Supplementary Estimate.

Question put:—

The House divided: Ayes 349, Noes 189.

Division No. 74]
[10 pm


AYES


Adley, Robert
Brinton, Tim


Alexander, Richard
Brittan, Rt Hon Leon


Alison, Rt Hon Michael
Brooke, Hon Peter


Alton, David
Browne, John


Amess, David
Bruce, Malcolm


Ancram, Michael
Bruinvels, Peter


Arnold, Tom
Bryan, Sir Paul


Ashby, David
Buck, Sir Antony


Ashdown, Paddy
Bulmer, Esmond


Aspinwall, Jack
Burt, Alistair


Atkins, Rt Hon Sir H.
Butcher, John


Atkins, Robert (South Ribble)
Butler, Hon Adam


Atkinson, David (B'm'th E)
Butterfill, John


Baker, Rt Hon K. (Mole Vall'y)
Carlile, Alexander (Montg'y)


Baker, Nicholas (N Dorset)
Carlisle, John (N Luton)


Baldry, Tony
Carlisle, Kenneth (Lincoln)


Batiste, Spencer
Carlisle, Rt Hon M. (W'ton S)


Beith, A. J.
Carttiss, Michael


Bellingham, Henry
Cartwright, John


Bendall, Vivian
Cash, William


Bennett, Rt Hon Sir Frederic
Chalker, Mrs Lynda


Benyon, William
Channon, Rt Hon Paul


Biffen, Rt Hon John
Chapman, Sydney


Biggs-Davison, Sir John
Chope, Christopher


Blackburn, John
Churchill, W. S.


Blaker, Rt Hon Sir Peter
Clark, Hon A. (Plym'th S'n)


Bonsor, Sir Nicholas
Clark, Dr Michael (Rochford)


Bottomley, Peter
Clark, Sir W. (Croydon S)


Bottomley, Mrs Virginia
Clarke, Rt Hon K. (Rushcliffe)


Bowden, A. (Brighton K'to'n)
Clegg, Sir Walter


Bowden, Gerald (Dulwich)
Cockeram, Eric


Brandon-Bravo, Martin
Colvin, Michael


Bright, Graham
Conway, Derek





Coombs, Simon
Howarth, Alan (Stratf'd-on-A)


Cope, John
Howe, Rt Hon Sir Geoffrey


Cormack, Patrick
Howell, Rt Hon D. (G'ldford)


Corrie, John
Howell, Ralph (N Norfolk)


Couchman, James
Howells, Geraint


Cranborne, Viscount
Hubbard-Miles, Peter


Critchley, Julian
Hughes, Simon (Southwark)


Crouch, David
Hunt, David (Wirral)


Currie, Mrs Edwina
Hunt, John (Ravensbourne)


Dickens, Geoffrey
Hunter, Andrew


Dicks, Terry
Hurd, Rt Hon Douglas


Dorrell, Stephen
Irving, Charles


du Cann, Rt Hon Sir Edward
Jenkin, Rt Hon Patrick


Dunn, Robert
Johnson Smith, Sir Geoffrey


Durant, Tony
Johnston, Russell


Dykes, Hugh
Jones, Gwilym (Cardiff N)


Edwards, Rt Hon N. (P'broke)
Jones, Robert (W Herts)


Eggar, Tim
Jopling, Rt Hon Michael


Emery, Sir Peter
Joseph, Rt Hon Sir Keith


Evennett, David
Kellett-Bowman, Mrs Elaine


Eyre, Sir Reginald
Key, Robert


Fairbairn, Nicholas
King, Roger (B'ham N'field)


Fallon, Michael
King, Rt Hon Tom


Farr, Sir John
Kirkwood, Archy


Favell, Anthony
Knight, Gregory (Derby N)


Fenner, Mrs Peggy
Knight, Mrs Jill (Edgbaston)


Finsberg, Sir Geoffrey
Knowles, Michael


Fletcher, Alexander
Knox, David


Fookes, Miss Janet
Lamont, Norman


Forman, Nigel
Latham, Michael


Forsyth, Michael (Stirling)
Lawler, Geoffrey


Forth, Eric
Lawrence, Ivan


Fowler, Rt Hon Norman
Lawson, Rt Hon Nigel


Fox, Marcus
Lee, John (Pendle)


Franks, Cecil
Leigh, Edward (Gainsbor'gh)


Fraser, Peter (Angus East)
Lennox-Boyd, Hon Mark


Freeman, Roger
Lester, Jim


Gale, Roger
Lewis, Sir Kenneth (Stamf'd)


Galley, Roy
Lightbown, David


Gardiner, George (Reigate)
Lilley, Peter


Gardner, Sir Edward (Fylde)
Lloyd, Ian (Havant)


Garel-Jones, Tristan
Lloyd, Peter, (Fareham)


Glyn, Dr Alan
Lord, Michael


Gorst, John
Luce, Richard


Gow, Ian
Lyell, Nicholas


Gower, Sir Raymond
McCrindle, Robert


Grant, Sir Anthony
McCurley, Mrs Anna


Greenway, Harry
Macfarlane, Neil


Gregory, Conal
MacGregor, John


Griffiths, E. (B'y St Edm'ds)
MacKay, Andrew (Berkshire)


Griffiths, Peter (Portsm'th N)
MacKay, John (Argyll &amp; Bute)


Grist, Ian
Maclean, David John


Ground, Patrick
Maclennan, Robert


Grylls, Michael
McNair-Wilson, P. (New F'st)


Gummer, John Selwyn
McQuarrie, Albert


Hamilton, Hon A. (Epsom)
Madel, David


Hampson, Dr Keith
Major, John


Hanley, Jeremy
Malins, Humfrey


Hargreaves, Kenneth
Malone, Gerald


Harris, David
Maples, John


Harvey, Robert
Marland, Paul


Haselhurst, Alan
Marshall, Michael (Arundel)


Havers, Rt Hon Sir Michael
Mather, Carol


Hawkins, C. (High Peak)
Maude, Hon Francis


Hawkins, Sir Paul (SW N'folk)
Mawhinney, Dr Brian


Hayes, J.
Maxwell-Hyslop, Robin


Hayhoe, Barney
Mayhew, Sir Patrick


Hayward, Robert
Meadowcroft, Michael


Heath, Rt Hon Edward
Mellor, David


Heathcoat-Amory, David
Merchant, Piers


Heddle, John
Meyer, Sir Anthony


Henderson, Barry
Miller, Hal (B'grove)


Hickmet, Richard
Mills, lain (Meriden)


Hicks, Robert
Mills, Sir Peter (West Devon)


Hill, James
Miscampbell, Norman


Hind, Kenneth
Mitchell, David (NW Hants)


Holland, Sir Philip (Gedling)
Monro, Sir Hector


Holt, Richard
Montgomery, Sir Fergus


Hordern, Peter
Moore, John


Howard, Michael
Morris, M. (N'hampton, S)






Morrison, Hon C. (Devizes)
Skeet, T. H. H.


Morrison, Hon P. (Chester)
Smith, Tim (Beaconsfield)


Moynihan, Hon C.
Soames, Hon Nicholas


Mudd, David
Speed, Keith


Murphy, Christopher
Spence, John


Neale, Gerrard
Spencer, Derek


Nelson, Anthony
Spicer, Jim (W Dorset)


Neubert, Michael
Spicer, Michael (S Worcs)


Newton, Tony
Squire, Robin


Nicholls, Patrick
Stanbrook, Ivor


Norris, Steven
Stanley, John


Onslow, Cranley
Steen, Anthony


Oppenheim, Phillip
Stern, Michael


Oppenheim, Rt Hon Mrs S.
Stevens, Lewis (Nuneaton)


Osborn, Sir John
Stevens, Martin (Fulham)


Ottaway, Richard
Stewart, Andrew (Sherwood)


Page, Sir John (Harrow W)
Stewart, Ian (N Hertf'dshire)


Page, Richard (Herts SW)
Stradling Thomas, J.


Parkinson, Rt Hon Cecil
Sumberg, David


Parris, Matthew
Taylor, John (Solihull)


Patten, Christopher (Bath)
Terlezki, Stefan


Patten, John (Oxford)
Thatcher, Rt Hon Mrs M.


Pattie, Geoffrey
Thomas, Rt Hon Peter


Pawsey, James
Thompson, Donald (Calder V)


Peacock, Mrs Elizabeth
Thompson, Patrick (N'ich N)


Penhaligon, David
Thorne, Neil (Ilford S)


Percival, Rt Hon Sir Ian
Thornton, Malcolm


Pollock, Alexander
Thurnham, Peter


Porter, Barry
Townsend, Cyril D. (B'heath)


Portillo, Michael
Tracey, Richard


Powell, William (Corby)
Trippier, David


Powley, John
Trotter, Neville


Prentice, Rt Hon Reg
Twinn, Dr Ian


Price, Sir David
van Straubenzee, Sir W.


Pym, Rt Hon Francis
Vaughan, Sir Gerard


Raffan, Keith
Viggers, Peter


Raison, Rt Hon Timothy
Waddington, David


Rathbone, Tim
Wakeham, Rt Hon John


Rees, Rt Hon Peter (Dover)
Waldegrave, Hon William


Renton, Tim
Walden, George


Rhodes James, Robert
Walker, Rt Hon P. (W'cester)


Rhys Williams, Sir Brandon
Wallace, James


Ridley, Rt Hon Nicholas
Waller, Gary


Rifkind, Malcolm
Ward, John


Rippon, Rt Hon Geoffrey
Wardle, C. (Bexhill)


Roberts, Wyn (Conwy)
Warren, Kenneth


Robinson, Mark (N'port W)
Watson, John


Roe, Mrs Marion
Watts, John


Ross, Stephen (Isle of Wight)
Wells, Bowen (Hertford)


Rost, Peter
Wells, Sir John (Maidstone)


Rowe, Andrew
Wheeler, John


Rumbold, Mrs Angela
Whitfield, John


Ryder, Richard
Whitney, Raymond


Sackville, Hon Thomas
Wiggin, Jerry


Sainsbury, Hon Timothy
Wilkinson, John


Sayeed, Jonathan
Wolfson, Mark


Scott, Nicholas
Wood, Timothy


Shaw, Giles (Pudsey)
Woodcock, Michael


Shaw, Sir Michael (Scarb')
Yeo, Tim


Shelton, William (Streatham)
Young, Sir George (Acton)


Shepherd, Colin (Hereford)



Shersby, Michael
Tellers for the Ayes:


Silvester, Fred
Mr. Robert Boscawen and


Sims, Roger
Mr. Ian Lang.


NOES


Adams, Allen (Paisley N)
Blair, Anthony


Anderson, Donald
Body, Richard


Archer, Rt Hon Peter
Boothroyd, Miss Betty


Ashton, Joe
Boyes, Roland


Atkinson, N. (Tottenham)
Bray, Dr Jeremy


Bagier, Gordon A. T.
Brown, Gordon (D'f'mline E)


Banks, Tony (Newham NW)
Brown, Hugh D. (Pro van)


Barnett, Guy
Brown, N. (N'c'tle-u-Tyne E)


Barron, Kevin
Brown, R. (N'c'tle-u-Tyne N)


Beckett, Mrs Margaret
Buchan, Norman


Beggs, Roy
Budgen, Nick


Bell, Stuart
Caborn, Richard


Bennett, A. (Dent'n &amp; Red'sh)
Callaghan, Jim (Heyw'd &amp; M)


Bidwell, Sydney
Campbell, Ian





Campbell-Savours, Dale
Loyden, Edward


Canavan, Dennis
McCartney, Hugh


Clark, Dr David (S Shields)
McDonald, Dr Oonagh


Clarke, Thomas
McGuire, Michael


Clay, Robert
McKay, Allen (Penistone)


Clwyd, Mrs Ann
McKelvey, William


Cocks, Rt Hon M. (Bristol S.)
Mackenzie, Rt Hon Gregor


Cohen, Harry
McWilliam, John


Coleman, Donald
Madden, Max


Concannon, Rt Hon J. D.
Maginnis, Ken


Cook, Frank (Stockton North)
Marek, Dr John


Cook, Robin F. (Livingston)
Marlow, Antony


Corbett, Robin
Marshall, David (Shettleston)


Cowans, Harry
Mason, Rt Hon Roy


Cox, Thomas (Tooting)
Maxton, John


Craigen, J. M.
Maynard, Miss Joan


Crowther, Stan
Michie, William


Cunningham, Dr John
Mikardo, Ian


Dalyell, Tam
Millan, Rt Hon Bruce


Davies, Rt Hon Denzil (L'Ili)
Miller, Dr M. S. (E Kilbride)


Davies, Ronald (Caerphilly)
Mitchell, Austin (G't Grimsby)


Davis, Terry (B'ham, H'ge H'l)
Morris, Rt Hon A. (W'shawe)


Deakins, Eric
Morris, Rt Hon J. (Aberavon)


Dewar, Donald
Nellist, David


Dixon, Donald
Nicholson, J.


Dobson, Frank
Oakes, Rt Hon Gordon


Dormand, Jack
O'Brien, William


Douglas, Dick
O'Neill, Martin


Dover, Den
Park, George


Dubs, Alfred
Parry, Robert


Dunwoody, Hon Mrs G.
Patchett, Terry


Eadie, Alex
Pavitt, Laurie


Eastham, Ken
Pike, Peter


Edwards, Bob (W'h'mpt'n SE)
Powell, Rt Hon J. E. (S Down)


Evans, John (St. Helens N)
Powell, Raymond (Ogmore)


Ewing, Harry
Prescott, John


Fatchett, Derek
Radice, Giles


Field, Frank (Birkenhead)
Randall, Stuart


Fisher, Mark
Redmond, M.


Flannery, Martin
Rees, Rt Hon M. (Leeds S)


Forrester, John
Richardson, Ms Jo


Foster, Derek
Robertson, George


Foulkes, George
Rogers, Allan


Fraser, J. (Norwood)
Ross, Wm. (Londonderry)


Freeson, Rt Hon Reginald
Rowlands, Ted


Freud, Clement
Sedgemore, Brian


Fry, Peter
Sheerman, Barry


Garrett, W. E.
Sheldon, Rt Hon R.


George, Bruce
Shepherd, Richard (Aldridge)


Godman, Dr Norman
Shore, Rt Hon Peter


Gould, Bryan
Short, Ms Clare (Ladywood)


Gourlay, Harry
Silkin, Rt Hon J.


Hamilton, Neil (Tatton)
Skinner, Dennis


Hamilton, W. W. (Central Fife)
Smith, C.(Isl'ton S &amp; F'bury)


Hardy, Peter
Smith, Rt Hon J. (M'kl'ds E)


Harrison, Rt Hon Walter
Smyth, Rev W. M. (Belfast S)


Hart, Rt Hon Dame Judith
Snape, Peter


Hawksley, Warren
Soley, Clive


Heffer, Eric S.
Spearing, Nigel


Hogg, N. (C'nauld &amp; Kilsyth)
Stokes, John


Holland, Stuart (Vauxhall)
Strang, Gavin


Home Robertson, John
Straw, Jack


Hoyle, Douglas
Taylor, Teddy (S'end E)


Hughes, Dr. Mark (Durham)
Thomas, Dafydd (Merioneth)


Hughes, Robert (Aberdeen N)
Thomas, Dr R. (Carmarthen)


Hughes, Roy (Newport East)
Thompson, J. (Wansbeck)


Janner, Hon Greville
Thorne, Stan (Preston)


John, Brynmor
Tinn, James


Jones, Barry (Alyn &amp; Deeside)
Torney, Tom


Kaufman, Rt Hon Gerald
Walker, Cecil (Belfast N)


Kinnock, Rt Hon Neil
Wardell, Gareth (Gower)


Lambie, David
Wareing, Robert


Lamond, James
Weetch, Ken


Leadbitter, Ted
Welsh, Michael


Leighton, Ronald
White, James


Lewis, Ron (Carlisle)
Wigley, Dafydd


Lewis, Terence (Worsley)
Williams, Rt Hon A.


Litherland, Robert
Wilson, Gordon


Lloyd, Tony (Stretford)
Winnick, David


Lofthouse, Geoffrey
Woodall, Alec






Young, David (Bolton SE)
Mr. James Hamilton and



Mr. Frank Haynes.


Tellers for the Noes:

Question accordingly agreed to.

Resolved,
That a supplementary sum, not exceeding £119,218,000, be granted to Her Majesty out of the Consolidated Fund to defray the charges which will come in course of payment during the year ending on 31st March 1985 for expenditure by the Treasury in connection with payments to the Budget of the European Communities not covered by direct charges on the Consolidated Fund under section 2(3) of the European Communities Act 1972, as set out in House of Commons Paper No. 145.

Bill ordered to be brought in upon the foregoing Resolution by the Chairman of Ways and Means, Chancellor of the Exchequer, Mr. Peter Rees, Mr. John Moore, Mr. Barney Hayhoe, and Mr. Ian Stewart.

CONSOLIDATED FUND (No. 2)

Mr. John Moore accordingly presented a Bill to apply a sum out of the Consolidated Fund to the service of the year ending on 31 March 1985: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 60.]

SOCIAL SERVICES

Motion made,
That Mr. James Couchman be discharged from the Social Services Committee and Mr. Tony Favell be added.—[Mr. Marcus Fox, on behalf of the Committee of Selection.]

Hon. Members: Object.

EDUCATION, SCIENCE AND ARTS

Motion made,
That Mr. George Walden be discharged from the Education, Science and Arts Committee and Mr. Malcolm Thornton be added.—[Mr. Marcus Fox, on behalf of the Committee of Selection.]

Hon. Members: Object.

West Lothian (Finance)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Peter Lloyd.]

Mr. Tarn Dalyell: I am a passionate believer in the authority in their own sphere of local authorities. I refrain from public comment on local authority matters unless invited to do so by councillors, and in agreement with them.
However, at the end of a long and serious meeting on 7 January at the council chambers in Bathgate with councillor Dominic MacAuly, councillors Robert Lee, Alastair Mackie and Donald Stavent, district chief executive David Harrison, treasurer Stanley Stirton and housing director John Spraggon, my hon. Friend the Member for Livingston (Mr. Cook) and I were so invited.
First, however, I would like publicly to thank the hon. Member for Edinburgh, South (Mr. Ancram) for his consideration of the special housing needs of West Lothian and for awarding supplementary housing capital allocations for the current financial year and enhanced capital allocations for the year 1985–86.
Secondly, the debate is neither a diatribe nor even a groan, because I do not believe that there has been deliberate bias by Scottish Office officials against West Lothian.
Our difficulty emanates from the unique circumstances surrounding the growth in the financial circumstances of the 1970s and 1980s of Livingston new town. The purpose of the debate is to concern itself with the future rather than past recriminations.
I therefore ask the Minister to address himself to the following questions of which I have given him notice.
First, does the Secretary of State realise that West Lothian district is facing its highest rate increase for several years simply because of his action in reducing rate support grant from £2·5 million to £1·1 million? The district council would have been faced with a rate increase not exceeding 5 per cent., yet thanks to this gram loss the rate increase will now be of the order of 20 per cent. This does not say much for his idea of maintaining rate stability.
Secondly, does the Secretary of State realise that the council is being supported by some of the non-domestic ratepayers, notably the National Federation of Self-Employed and Small Businesses, which has been impressed by the soundness of the council's policies and has readily given its support to the council? The federation is appalled at the loss of grant being contemplated and recognises that this has placed West Lothian in an impossible position. It is, indeed, a situation of some irony when one of the foremost representative bodies for non-domestic ratepayers recognises that the Secretary of State, by his actions on rate support grant, is causing the local rate problems. The council is, in fact, singled out for some approval by the body concerned.
Thirdly, why does the Secretary of State consider it equitable that in 1985–86 West Lothian, with a population of 141,000, should receive £1·1 million, with a further fall of £400,000 likely to come later, when Argyll and Bute council with a population of 65,000 is to receive more than £2·5 million? That is a puzzling comparison, which greatly interests the West Lothian representatives. Why does the Secretary of State place such great emphasis on the burdens caused by tourists and inward commuters?


Surely any reasonable person would recognise that far more severe burdens are caused by the effects of severe unemployment and increasing population throughout the year than result from short-term responsibilities caused by tourists. As for commuters, again I should have thought that a council faced with the provision of services to residents, many of whom are commuters, faces a more serious problem. In short, the logic of the distribution system is considered to be grossly unfair and unreasonable to West Lothiam council.
Fourthly, why did the Secretary of State consider it necessary to make a 72 per cent. reduction in the grant payable to West Lothian council? An increase would certainly be more relevant, particularly in the light of the forecast inflation level. Why was it necessary to contemplate such severe reductions in rate support grant to district councils in general and West Lothian council in particular? Do the Government accept that this reduction in grant will be the cause of the council's first major rate increase?
Fifthly, as overall grants to West Lothian council have dropped by more than 90 per cent. in four or five years, with untold damage to the economy, will the Secretary of State accept the need to revise the distribution plan for West Lothian and similar councils? The loss of more than £6 million is a major economic factor for shops and businesses in West Lothian in terms of lost purchasing power. The council therefore appeals for reconsideration of the rate support grant proposals.
Sixthly, having previously made an appeal for equity on behalf of the council on the matter of its spending level as compared with the figure for expenditure need determined by the Secretary of State, I urgently repeat that appeal. The council's spending is likely to be 4 per cent. below the expenditure need figure of £9,376,000. Yet the Secretary of State proposes further penalties in the future due to the arbitrary level of the revenue guideline. Surely that is grossly unfair to the council and the Government should now wish to reorganise their thinking.
Finally, I refer once again to the report and recommendations of the Bathgate working party. In the light of the obligations placed on the council by Leyland and by Polkemmet, it is to be hoped that the Secretary of State will look favourably upon West Lothian council when he deals with the general services capital allocations in some days' time. The same report identified the problems at Murrayfield, Blackburn. I hope that the Minister of State will accept the council's invitation to look at this scheme and to allow a special grant to be paid to remedy the severe deprivation.
The Scottish Office has had notice of those questions since Friday. I look forward to the Minister's replies.

Mr. Robin Cook: I congratulate my hon. Friend the Member for Linlithgow (Mr. Dalyell) on securing this debate, and, as a Member for a neighbouring constituency, I am grateful to him for allowing me to take part.
I wish to make three points as briefly as I may. My hon. Friend asked a number of very pertinent questions, and I hope that the Minister will answer them; I certainly intend

to give him adequate time to do so. I wish to force those questions home with a number of points which add to their force and explain the reasons for seeking this debate.
First, there can be no doubt whatever that West Lothian needs additional financial resources. That need can be justified on two grounds. It is justified, first, by reference to the deprivation in the area. The Bathgate-Livingston travel-to-work area, which contains most of West Lothian, has the third highest rate of unemployment of any travel-to-work area in mainland Scotland. For reasons which my hon. Friend has hinted, all the signs are that the problem will get worse before it starts to get better. I shall not elaborate on that today, save to cite a chilling fact that emerged from a survey in my constituency last month. There is a council estate in my constituency in which the rate of unemployment among teenagers is now a staggering 77 per cent. Against the background of social dereliction on that scale, additional resources are plainly needed.
Secondly, the need for additional resources is abundantly clear, due to the population explosion in the area. In my constituency the population has grown faster in the past decade than that of any other constituency in Scotland, with just one exception. The rate support grant makes much of the additional expenditure on commuters and tourists. I am prepared to recognise that there is a marginal increase in the burden on local authorities from those two sources, but the burden from commuters or tourists can be as nothing compared with the burden from the residents in the area who make demands on services. Those residents have been increasing rapidly in the West Lothian area.
People in West Lothian, even those who are sufficiently skilled to understand the rate support grant formula, view with incomprehension the fact that Argyll, which has half the population of West Lothian, will in a couple of years recieve four times the RSG that will be received by West Lothian if the order goes through the House on Thursday.
Thirdly, West Lothian is in a distinctive position. As a result of the adoption of the client-group method of assessment, there was a sharp increase in the Government's allowance calculation of the expenditure needs of West Lothian. The Government then arbitrarily reduced the expenditure need figure to arrive at a guideline figure. We are now in the curious and clearly anomalous position that the guideline for expenditure in West Lothian is less than the amount the Government assess us as needing to spend to meet our needs. If West Lothian spends up to the expenditure need figure, it will incur penalties. I invite the Under-Secretary of State to justify that curious position.
West Lothian, having stuck to the guideline, having not sought to spend up to the expenditure need figure, having an expenditure in the past year almost spot on its guideline and, by the Minister's definition, being a responsible authority, faces a cut in grant of up to three quarters over two years. Plainly such a cut cannot be faced without a significant increase in rates or a significant reduction in services.
If one takes a longer-term perspective and looks at the past five years and the coming two years, a clear picture of a sharp reduction in resources emerges. In 1980, West Lothian received in total from housing support grant and rate support grant £7 million. It now does not receive a penny in housing support grant. That source, which once provided 45 per cent. of the council's housing budget, has


totally disappeared. In two years, under the proposals in the rate support grant order, West Lothian will receive a mere £700,000.
In six years, we shall have moved from a position of receiving £7 million in external support to a mere £700.000—a 90 per cent. drop. That cut represents a sharp reduction in the purchasing power of the West Lothian economy. It means that the people of West Lothian are poorer and that an element of the increase in unemployment we have witnessed during the past five years is attributable to that reduction in Government support.
I remind the Under-Secretary of State that the conclusions about the unemployment rate in the area are set out clearly in the Government's approved working party report on Bathgate which was produced in response to the closure of the British Leyland plant. The report contains a number of recommendations which, if implemented, would mean additional expenditure by the West Lothian district council, for instance, on environmental projects and recreational schemes and on an increased subscription on which to base support for enterprise, all of which would increase rather than reduce the demands on the district council.
The final paragraph of the report reads:
It must be for the public agencies and local authorities responsible for the measures we have recommended to finance them from within their existing resources and allocations, possibly by the reordering of their priorities, or, where appropriate, to seek in the normal way the augmentation of those resources
The tragedy of the position faced by myself and my hon. Friend the Member for Linlithgow is that we are not asking for an augmentation of those resources — although we could justify such an augmentation, given our needs. Given the clear analysis in the report of the need in West Lothian for additional support, we are asking the Government at least not to go ahead with the proposed sharp reduction in support. I hope that the Under-Secretary of State will tell us that he is willing to reconsider.

The Parliamentary Under-Secretary of State for Scotland (Mr. Michael Ancram): I listened with great care and attention to the hon. Members for Linlithgow (Mr. Dalyell) and for Livingston (Mr. Cook). As the hon. Member for Livingston made clear, the points that they both raised paralleled one another. I hope that during my remarks both hon. Members will feel that I have tried to answer their questions, if not in the order in which they were posed.
I am grateful to the hon. Member for Linlithgow for his comments about what the Government have managed to do for housing in West Lothian. I am well aware of the particular housing problems within that authority, as well as the difficulties with this year's housing revenue account block because of an expected shortfall against earlier estimates of capital receipts, due in large measure to a reduction in applications to purchase council houses. Last month, the Secretary of State decided to issue the council with a supplementary allocation of £1 million, increasing the council's net allocation for 1984–85 by 80 per cent., to £2,252,000 to compensate for the expected shortfall in receipts.
In setting the provisional allocations for 1985–86, we have again taken account of West Lothian's particular problems and issued a gross provisional allocation of £6·3

million, incorporating a special condensation and dampness allocation of £300,000. That represents a 29 per cent. increase over the March 1984 allocation for this year, and meets 90 per cent. of the council's bid for resources on this block.
On the non-HRA block, West Lothian received a small supplementary of £20,000 last month to cover a forecast, legally committed overspend on the block. The council's provisional allocation of £900,000 for 1985–86 represents an 84 per cent. increase over last March's allocation for this year, against—and I must put it in this perspective — a national reduction of 33 per cent. in the total resources available on this block. That should enable West Lothian to make substantial inroads into the backlog of applications for discretionary grants, as well as to plan for further approvals.
In terms of supplementary allocations for the current year and provisional allocations for next, not only have we treated West Lothian more than fairly, but we have recognised the serious points raised not least by the hon. Member for Linlithgow on previous occasions.
The hon. Member for Linlithgow set out fully and clearly the points on which West Lothian district council is concerned about the present arrangements for local authority current expenditure. In particular, he raised questions on the way in which current expenditure guidelines and rate support grant are calculated.
Current expenditure guidelines were first issued in 1976–77 by the then Labour Government to help authorities plan expenditure compatible with the Government's plans for total local authority expenditure. The guidelines for individual authorities were heavily influenced by their existing levels of expenditure, and the hon. Member has pointed out on other occasions the consequences of this for West Lothian, whose level of expenditure per head has been lower than that of a number of comparable authorities.
We accepted that the method of constructing guidelines, which we inherited from the Labour Government was not fair to authorities such as West Lothian, and for 1982–83 we changed the basis to a method based on client-group assessments of relative expenditure need. These assessments are based on a service-by-service examination of the factors that determine an authority's expenditure needs relative to other authorities. In using those assessments as the basis of an authority's guideline, we have, of course, to recognise that some authorities have a history of high spending and that it is necessary to add to their assessments to give them a realistic target for the year immediately ahead.
Also, since it is the Government's policy to reduce local authority expenditure, it does not make sense to give authorities guidelines which imply significant increases in expenditure in real terms. That has meant that some authorities have to receive guidelines below their assessment of need. For those authorities, which include West Lothian, we were able to allow some movement towards client-group assessment in the 1984–85 guidelines with figures implying a marginal increase in real terms. However, we could not allow this latitude in 1985–86, and no authority has a guideline which allows it to increase its expenditure in real terms without penalty.
West Lothian, I know, welcomed the move to the client-group method of calculating guidelines, and in 1984–85 in particular it benefited in the form of more generous guidelines than the majority of authorities. The


increase in guidelines from 1983–84 was nearly 35 per cent. as West Lothian was among the 21 authorities that had guidelines marginally above their previous year's budget in real terms. For 1985–86 it is among 27 authorities that can maintain their 1984–85 budgeted expenditure in real terms without suffering grant penalty.
In October, the Secretary of State fixed the guidelines of West Lothian and other authorities in the same position at a level which, on the current estimates of inflation, would allow them to maintain expenditure in real terms. When the estimate of inflation was revised in the Chancellor's Autumn Statement, my right hon. Friend increased the guidelines of West Lothian and of those other authorities to ensure that that position was maintained. For the remainder of authorities not in West Lothian's position real term cuts are needed if severe grant penalties are to be avoided in 1985–86. thus, on guideline calculation, West Lothian has always come out better than the average since we changed to the client-group method.
I know West Lothian would like a guideline that is much higher. However, it would be quite inconsistent with our policy of expenditure reduction to set a guideline implying a significant increase in expenditure. Scottish local authorities, despite our requests to them to spend in line with what the nation can afford and the action we have taken to bring down rates and expenditure, are still spending more than they did in 1978–79. It is essential that increases should stop and reductions should take place. The best that any authority can expect in these circumstances is a guideline which allows it to maintain its expenditure in real terms—as West Lothian has.

Mr. Robin Cook: I hope that the Minister appreciates that as a result of the reduction in grant, West Lothian district council can only maintain its expenditure according to the guideline figure during the coming year by a rates increase of 20 per cent. An increase of less than 20 per cent. will not allow it to meet the guideline expenditure that has been fixed for it by the Government.

Mr. Ancram: I shall be dealing with those figures. If the hon. Member for Livingston investigates this point, he will find that, if his authority comes down to the guideline, there will not have to be a rates increase of 20 per cent. However, I shall come in a moment to the rate support grant and its effect on rates. I am very much aware of the point that the hon. Members for Linlithgow and for Livingston made about the special problems which face West Lothian with its increasing population. The Secretary of State, in a letter to the convenor of the district council in December, said that he would bear in mind this and the other points that had been made.
It would not be logical either, as the hon. Member for Linlithgow has previously suggested, to penalise only that expenditure above the client-group assessment. Guidelines are designed so that they total to the Government's expenditure provision for the year concerned. Penalties are designed to put pressure on each authority to spend in line with its guideline with the objective of bringing the total of local authority expenditure into line with the Government's plans. If for some authorities no pressure was applied until expenditure was well above guidelines, there would be no prospect of our bringing local authority expenditure under control.
West Lothian budgeted to spend in 1984–85 £117,000, or 1·44 per cent. above its guideline. With modest savings, the authority could have its £83,000 grant penalty returned to it in the next financial year. If it then maintains its expenditure in real terms and makes no increase, it should, on present forecasts of inflation, be able to avoid penalties in 1985–86. I do not think that that is setting the authority an impossible task, given our overall policy of reducing local authority expenditure.
Reference has also been made to the way in which the distribution of rate support grant for 1985–86 would affect West Lothian. We shall, of course, be debating this fully on Thursday. Therefore, I do not intend to go into the detail of next year's settlement.
In brief, we decided that it was necessary to put further pressure on authorities to reduce their expenditure by cutting the percentage of rate support grant. That mechanism for restraining expenditure was accepted by the Labour Government, and the amount by which we are cutting the grant percentage in 1985–86 still falls short of the cut made in the percentage by the right hon. Member for Glasgow, Govan, (Mr. Millan) in 1977–78.
We also had to reach a decision on whether that reduction should fall on regions and districts in proportion to their present share of grant or whether the proportion of grant between regions and districts should change. There is again nothing new in that. The Labour party changed the proportions when it was in power. We decided that it was important to keep to a minimum grant loses amoung regional councils since regional rates account for by far the largest part of the bill that ratepayers have to pay. Therefore, we increased the regional councils' share.
That has led to reductions in the amount of rate support grant paid to districts. However, it is important to make two points about this. First, there is a limit in the amount of grant which any district council will lose in 1985–86, as compared with 1984–85. No district will lose more than the equivalent of a 4p rate. That, therefore, is the maximum by which the rates will go up as a result of changes in the amount of needs element for whatever reason.
Secondly, district ratepayers are regional ratepayers, too, and the district rate is only a quarter of the regional rate. Thus, district ratepayers will benefit from the emphasis put on limiting regional grant losses, and what may sound like large percentage changes in district terms will not be so large when looked at in total rate bill terms, especially if authorities spend at guidelines.
If both Lothian regional council and West Lothian district council spend in line with guidelines in 1984–85 and 1985–86, taking account of revaluation, the total rate burden on West Lothian ratepayers will go up by only 1 per cent. That is very different from the 20 per cent. figure which the hon. Member for Livingston mentioned.
Because of revaluation, the effect on different groups of ratepayers will vary. Domestic ratepayers on this basis would see the rate bills go up by 11·5 per cent on average. Industrial ratepayers would see their bills fall by 6 per cent. on average. That is a point worth bearing in mind by the hon. Members for Linlithgow and for Livingston, who rightly made play of the need for jobs and industry in their area. The answer is that if the authorities spend at guideline, industrial rates will on average go down. Thus, I hope that West Lothian ratepayers, both domestic and non-domestic, will put their regional and district councils


under strong pressure to bring their spending into line with guidelines because that is the key to keeping rate increases down.
The hon. Members for Linlithgow and for Livingston made a comparison between the amount of needs element paid to Argyll and Bute district council and the amount paid to West Lothian. However, I think that even the hon. Member for Livingston would agree that there are considerable differences between those two district councils. They are strikingly different in density of population. There are 3·3 persons per hectare in West Lothian, and only 0·1 in Argyll and Bute. On any view that is a huge difference. Argyll and Bute has to provide services to the islands off its coast, several of them with small populations. Those are important factors in pushing up the costs of a service such as cleansing which accounts for a substantial part of district council spending. Those factors are reflected in the assessments of need which underlie the grant distribution. The use of population figures adjusted for tourism and commuters which have been referred to do not have a major impact on the assessments in the way that sparsity does.
In addition to the assessments of need, the grant distribution takes account of loan charges—an area in which Argyll and Bute has a much higher figure than West Lothian. Income from specific grants, another factor which is taken into account, also goes some way to explain the difference. Therefore, to make the kind of simple comparison which has been made can be misleading. I hope that I have explained the reason for the apparently large difference in the figures.
On capital, the final allocations for 1985–86 are still being considered, but the figure decided upon ought to allow some scope for spending in accordance with the recommendations of the Bathgate working party, as well as certain improvements to basic services identified in the council's financial plan. I hope that authorities will be notified of their allocations in the next few weeks. I have noted the points that have been made tonight.
The provision for local authority capital expenditure has to be balanced against other sectors of the overall public expenditure programme, the total of which must be tightly constrained as part of the Government's overall economic strategy. Capital consent allocations have to be determined in the light of the relative need and competing claims of local authorities as shown in their financial plans. But inevitably the total bids are well in excess of the limited total resources available and some authorities will be disappointed.
The Government's view is that the first priority should be the adequate provision of basic environmental services, and that leisure and recreation services, though important, have a lower priority, but it is, of course, for each authority to decide to which projects to give priority in the light of the consents issued.
The hon. Members for Linlithgow and for Livingston presented West Lothian's case persuasively, but I cannot accept that its position is unique or that it has been unfairly treated by central Government. I hope that, in the light of what I have said this evening—

Mr. Dalyell: The Minister says that the position is not unique, but it is unique in that there is an increasing population. In the capital allocations for 1985–86, do we have the clear assurance that the increase in population will seriously be taken into account?

Mr. Ancram: The hon. Member is clearly referring to the effect that the population has on the guidelines and rate support grant distribution. Those points have been made before and we have them firmly in mind. The West Lothian authority is not unique in that respect. I hope that the hon. Member will feel that West Lothian has been fairly treated by the Government.

Question put and agreed to.

Adjourned accordingly at fourteen minutes to Eleven o'clock.